CIT v. Hero Honda Motors Ltd.

MARUTI SUZUKI INDIA LTD.,NEW DELHI vs. DCIT, NEW DELHI

In the result, the appeal of the Revenue in ITA No

Bench: Shri Shamim Yahya & Shri Kul Bharat[Assessment Year : 2010-11] Maruti Suzuki India Ltd., Vs Dcit, Plot No.1, Nelson Mandela Road, Circle-16(1), Vasant Kunj, New Delhi-110070. New Delhi. Pan-Aaacm0829Q Appellant Respondent [Assessment Year : 2010-11] Dcit, Vs Maruti Suzuki India Ltd., Circle-16(1), Plot No.1, Nelson Mandela Road, New Delhi. Vasant Kunj, New Delhi-110070. Pan-Aaacm0829Q Appellant Respondent Appellant By Shri Ajay Vohra, Sr.Adv., Shri Neeraj Jain, Adv. & Ms. Tejasvi Jain & Ms. Somya Jain, Ca Respondent By Shri G.C.Srivastava, Adv., Shri Kalrav Mehrotra, Adv. & Shri Mayank Patawari, Ca Date Of Hearing 11.11.2022 Date Of Pronouncement 09.02.2023

…46 (Del.). He submitted that there are series of decisions by the Hon’ble Apex Court, Hon’ble Delhi High Court and other High Courts in this regard. He drew our attention to the judgements of the Hon’ble High Court in the case of CIT vs Hero Honda Motors Ltd. 372 ITR 481 wherein the High Court has held that royalty payment made to a foreign company for merely acquiring right to use technical know-how whereas ownership and intellectual property rights in know-how remained with 46 | P a g e foreign company, was allowable revenue expenditure. He further contended that there is not exclusive in as much as in terms o…

DCIT, NEW DELHI vs. M/S. MARUTI SUZUKI INDIA LTD., NEW DELHI

In the result, the appeal of the Revenue in ITA No

Bench: Shri Shamim Yahya & Shri Kul Bharat[Assessment Year : 2010-11] Maruti Suzuki India Ltd., Vs Dcit, Plot No.1, Nelson Mandela Road, Circle-16(1), Vasant Kunj, New Delhi-110070. New Delhi. Pan-Aaacm0829Q Appellant Respondent [Assessment Year : 2010-11] Dcit, Vs Maruti Suzuki India Ltd., Circle-16(1), Plot No.1, Nelson Mandela Road, New Delhi. Vasant Kunj, New Delhi-110070. Pan-Aaacm0829Q Appellant Respondent Appellant By Shri Ajay Vohra, Sr.Adv., Shri Neeraj Jain, Adv. & Ms. Tejasvi Jain & Ms. Somya Jain, Ca Respondent By Shri G.C.Srivastava, Adv., Shri Kalrav Mehrotra, Adv. & Shri Mayank Patawari, Ca Date Of Hearing 11.11.2022 Date Of Pronouncement 09.02.2023

…46 (Del.). He submitted that there are series of decisions by the Hon’ble Apex Court, Hon’ble Delhi High Court and other High Courts in this regard. He drew our attention to the judgements of the Hon’ble High Court in the case of CIT vs Hero Honda Motors Ltd. 372 ITR 481 wherein the High Court has held that royalty payment made to a foreign company for merely acquiring right to use technical know-how whereas ownership and intellectual property rights in know-how remained with 46 | P a g e foreign company, was allowable revenue expenditure. He further contended that there is not exclusive in as much as in terms o…

DCIT,C-11(1), NEW DELHI vs. HERO MOTOCORP LTD.,, NEW DELHI

Appeal of the Revenue is dismissed

Bench: Shri Narendra Kumar Billaiya & Shri Kul Bharat

…owable revenue expenditure. It would be pertinent to note that he aforesaid orders of the Tribunal relating to assessment years 2000-01 to 2002-03 have been affirmed by the Delhi High Court in the assessee’s own case reported as CIT v. Hero Honda Motors Ltd.: 372 ITR 481. Copy of order in appellants's own case is enclosed at page nos. 464 - 472 of PB on Merits. In orders passed by the Tribunal for assessment years 2011-12 to 2013-14, 2015-16 and 2016-17, the royalty paid in terms of license B agreement has been held to be an allowable revenue deduction. In view of the above, the disallowance made by the assessing…

FRICK INDIA LTD.,NEW DELHI vs. DCIT, NEW DELHI

Accordingly, the appeal filed by the assessee is allowed in terms of our

Bench: Shri G.S. Pannu & Shri Ravish Sood

…ghts in the said know-how remained with the foreign company, then, the payment in question would be in the nature of a revenue expenditure, is supported by the judgment of the Hon’ble High Court of Delhi in the case of CIT Vs. Hero Honda Motors Ltd., (2015) 372 ITR 481 (Del). We, thus, in the backdrop of our aforesaid observations not finding favour with the view taken by the lower authorities wherein they had rejected the assessee’s claim for deduction of the payment made for the technical know-how to M/s Vilter Manufacturing Corporation, USA as a revenue expenditure, and had dubbed the same as a capital expe…

FRICK INDIA LTD vs. DCIT CIRCLE-11 (1),

Accordingly, the appeal filed by the assessee is allowed in terms of our

Bench: Shri G.S. Pannu & Shri Ravish Sood

…ghts in the said know-how remained with the foreign company, then, the payment in question would be in the nature of a revenue expenditure, is supported by the judgment of the Hon’ble High Court of Delhi in the case of CIT Vs. Hero Honda Motors Ltd., (2015) 372 ITR 481 (Del). We, thus, in the backdrop of our aforesaid observations not finding favour with the view taken by the lower authorities wherein they had rejected the assessee’s claim for deduction of the payment made for the technical know-how to M/s Vilter Manufacturing Corporation, USA as a revenue expenditure, and had dubbed the same as a capital expe…

HERO MOTO CORP LTD.,NEW DELHI vs. NEAC, DELHI

Bench: Shri Kul Bharat & Shri Prashant Maharishi(Through Video Conferencing)

…IN THE INCOME TAX APPELLATE TRIBUNAL [DELHI BENCH “I–1”: NEW DELHI] BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER (Through Video Conferencing) ITA. No. 706/Del/2021 (Assessment Year : 2016-17) M/s. Hero Moto Corp. Ltd., National The Grand Plaza, Plot No. 2, Vs. Nelson Mandela Road, e-Assessment Centre, Vasant Kunj, Phase – II, New Delhi – 110 070. Delhi. PAN: AAACH0812J AND STAY APP. No. 127/Del/2021. [ in ITA. No. 706/Del/2021 ] (Assessment Year : 2016-17) M/s. Hero Moto Corp. Ltd., National The Grand Plaza, Plot No. 2, Nelson Mandela Road, Vs. e-Assessment Centre, Vasant…

HERO MOTOCROP LTD.,NEW DELHI vs. ACIT, CIRCLE- 11(1), NEW DELHI

The appeal of the assessee is partly allowed

Bench: Shri Sudhanshu Srivastava & Shri O.P. Kantassessment Year: 2015-16

…llowable revenue expenditure. It was submitted that the aforesaid orders of the Tribunal relating to assessment years 2000-01 to 2002-03 have been affirmed by the Hon’ble Delhi High Court in the assessee’s own case reported as CIT v. Hero Honda Motors Ltd.: 372 ITR 481.48. It was also submitted that in orders passed by the Tribunal for assessment years 2011-12 to 2013-14, the royalty paid in terms of license B agreement has been held to be an allowable revenue deduction. Hero Motocorp Ltd. vs. ACIT 50.0 The Ld. CIT - DR relied upon the Assessment Order and Order of the TPO but could not distinguish the order…

DCIT, NEW DELHI vs. M/S. HERO HONDA MOTORS LTD., NEW DELHI

In the result, the appeal of the Revenue is dismissed

Bench: Shri Sudhanshu Srivastava & Shri O.P. Kantassessment Year: 2005-06

…sting business/apparatus and not for addition thereto. Thus, the fees paid by the assessee to Shri Tarun Khanna cannot be characterized as capital asset. Reliance was placed on the decision of the Hon’ble Delhi High Court in assessee’s own case, reported at 372 ITR 481 wherein disallowance of royalty paid to foreign JV partner on the similar issue was deleted on the ground that payment of royalty does not result in enduring benefit in the capital field to be treated as capital expenditure. It was submitted that the disallowance of fee paid by the assessee to Shri Tarun Khanna on the alternate ground of being…

M/S. HERO MOTOCORP LTD.,NEW DELHI vs. ADDL. CIT, NEW DELHI

In the result, the appeal of the Revenue is dismissed

Bench: Shri Sudhanshu Srivastava & Shri O.P. Kantassessment Year: 2005-06

…sting business/apparatus and not for addition thereto. Thus, the fees paid by the assessee to Shri Tarun Khanna cannot be characterized as capital asset. Reliance was placed on the decision of the Hon’ble Delhi High Court in assessee’s own case, reported at 372 ITR 481 wherein disallowance of royalty paid to foreign JV partner on the similar issue was deleted on the ground that payment of royalty does not result in enduring benefit in the capital field to be treated as capital expenditure. It was submitted that the disallowance of fee paid by the assessee to Shri Tarun Khanna on the alternate ground of being…

HONDA MOTORCYCLE AND SCOOTERS INDIA PVT. LTD.,GURUGRAM vs. DCIT, CIRCLE- 2(1), GURUGRAM

In the result, both the appeals filed by the assessee are allowed

Bench: Shri N.K. Billaiya & Ms. Suchitra Kamble(Through Video Conferencing)

…red only limited rights in the Agreement, then same reasons are applicable for running Royalty, and lumpsum Royalty payment should also be allowed as expenses. In this regard, reliance was placed on the following decisions:- [ij CIT v. Hero Honda Motors Ltd. 372 ITR 481 (Del.HC) [lij CIT V. Munjal Showa Ltd. 329 ITR 449 (Del.HC) (in) Maruti Suzuki India Ltd. vs Addl. CIT (ITA No.6021/Del/2012) (Assessment Year 2008-09] 42. The Ld.AR for the assessee further pointed out that this was a legal issue raised by the assessee where the facts were already on record and in the light of the decision of Hon'ble Supreme…

HONDA MOTORCYCLE AND SCOOTER INDIA PVT. LTD.,GURGAON vs. DCIT, CIRCLE- 2(1), GURGAON

In the result, the appeal of the assessee is allowed

Bench: Ms. Sushma Chowla, Vp & Shri N.K.Billaiya, Am आयकर अपील सं. / Ita No.7714/Del/2017 "नधा"रण वष" /Assessment Year 2012-13

…only limited rights in the Agreement, then same reasons are applicable for running Royalty, and lumpsum Royalty payment should also be allowed as expenses. In this regard, reliance was placed on the following decisions:- [i] CIT v. Hero Honda Motors Ltd. 372 ITR 481 (Del.HC) [ii] CIT V. Munjal Showa Ltd. 329 ITR 449 (Del.HC) [iii] Maruti Suzuki India Ltd. vs Addl. CIT (ITA No.6021/Del/2012) [Assessment Year 2008-09] 42. The Ld.AR for the assessee further pointed out that this was a legal issue raised by the assessee where the facts were already on record and in the light of the decision of Hon’ble Supre…

PRINCIPAL COMMISSIONER OF INCOME TAX, DELHI-2, vs. M/S CONTINENTAL INDIA (P) LTD.

Bench: HON'BLE MR. JUSTICE VIPIN SANGHI,HON'BLE MR. JUSTICE SANJEEV NARULA

…$~75 * IN THE HIGH COURT OF DELHI AT NEW DELHI + ITA 861/2019, CM APPL. 43005/2019, CM APPL. 43006/2019 PRINCIPAL COMMISSIONER OF INCOME TAX, DELHI-2, ..... Appellant Through: Ms. Vibhooti Malhotra, Sr. Standing counsel with Mr.Siddharth Manocha, Adv. versus M/S CONTINENTAL INDIA (P) LTD. ..... Respondent Through: CORAM: HON'BLE MR. JUSTICE VIPIN SANGHI HON'BLE MR. JUSTICE SANJEEV NARULA O R D E R % 26.09.2019 CM APPL. 43005/2019 (exemption) 1. Exemption allowed, subject to all just exceptions. 2. The application stands disposed of. CM APPL. 43006/2019 and ITA 861/2019 3. The revenue has preferred the present app…

DCIT, NEW DELHI vs. M/S. HERO MOTOCORP LTD., NEW DELHI

In the result, appeal of the assessee is allowed in part for statistical purposes and appeal of the revenue is dismissed

Bench: Shri Pramod Kumar & Shri K. Narasimha Chary

…as adopted by the revenue for the AYs 2010-11, 2011-12, 2012-13 and 2013-14 also. Learned AR submitted that the order of the Tribunal relating to the AY 2002-03 is confirmed by the Hon’ble Delhi High Court in assessee’s own case reported as CIT vs Hero Honda, 372 ITR 481. Even subsequently by order dated 23.4.2019, the Tribunal decided the issue in favour of the assessee for the AY 2009-10. 32. In view of the fact that the issue has been consistently decided in favour of the assessee for more than 13 years and also upheld by the Hon’ble jurisdictional High Court, the same approach has to be adopted in this case a…

M/S. MAHLE FILTER SYSTEMS (INDIA) LTD.,NEW DELHI vs. ADDL. CIT, NEW DELHI

In the result, the appeal of the assessee in ITA No

Bench: Shri N.K. Billaiya & Ms. Suchitra Kamble

…'ble Jurisdictional High Court, hold that the annual payment of royalty was a revenue expenditure. Accordingly, ground No.6 of the assessee's appeal is allowed.” 46. This decision of the co-ordinate bench has been upheld by the Hon'ble High Court of Delhi in 372 ITR 481 wherein the Hon'ble High Court has, in detail, considered the decision given in the case of J.K. Synthetics [supra]. Considering the facts of the case in totality, we do not find any reason to interfere with the findings of the CIT(A). However, depreciation allowed by the Assessing Officer has to be withdrawn since the impugned payment is being a…

DCIT, NEW DELHI vs. M/S. MAHLE FILTER SYSTEMS PVT. LTD., NEW DELHI

In the result, the appeal of the assessee in ITA No

Bench: Shri N.K. Billaiya & Ms. Suchitra Kamble

…'ble Jurisdictional High Court, hold that the annual payment of royalty was a revenue expenditure. Accordingly, ground No.6 of the assessee's appeal is allowed.” 46. This decision of the co-ordinate bench has been upheld by the Hon'ble High Court of Delhi in 372 ITR 481 wherein the Hon'ble High Court has, in detail, considered the decision given in the case of J.K. Synthetics [supra]. Considering the facts of the case in totality, we do not find any reason to interfere with the findings of the CIT(A). However, depreciation allowed by the Assessing Officer has to be withdrawn since the impugned payment is being a…