What is CIT v. IAEC (Pumps) Ltd. authority for?

Royalty paid for the non-exclusive use of patents and designs under a limited-period license, where payment depends on production and no rights are transferred, is revenue expenditure. Such expenditure enables efficient business operation without creating an enduring capital advantage.

How many judgments cite CIT v. IAEC (Pumps) Ltd.?

46 judgments on BharatTax cite CIT v. IAEC (Pumps) Ltd. (232 ITR 316), spanning 2012 to 2023.

CIT v. IAEC (Pumps) Ltd. (232 ITR 316)

Lg Electronics India (P) Ltd., New Delhi vs. ACIT, Noida

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

ITA 3613/DEL/2017[2006-07]Status: DisposedITAT Delhi18 Jul 2018AY 2006-07

Bench: Shri R. K. Panda & Shri Kuldip Singh

For Respondent: Shri H. K. Choudhary, CIT-DR

Section 143(3)Section 201(1)Section 251(1)(a)Section 40Section 80JSection 92C

…yment made for this purpose was eventually held to be an admissible revenue expenditure. In that case the information supplied was to be surrendered on the termination of the agreement and not to be put to use thereafter. In CIT Vs I.A.E.C (Pumps) Ltd. (1998) 232 ITR 316 (SC), the Hon’ble Supreme Court considered a case in which payment was made for use of patents and designs exclusively in India; the agreement was for a duration of 10 years with the parties having option to extend the agreement; there was a clause for non-disclosure to the third parties. In view of these facts, the Hon’ble Apex Court held that t…

Lg Electronics India (P) Ltd., New Delhi vs. ACIT, Noida

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

ITA 3612/DEL/2017[2005-06]Status: DisposedITAT Delhi18 Jul 2018AY 2005-06

Bench: Shri R. K. Panda & Shri Kuldip Singh

For Respondent: Shri H. K. Choudhary, CIT-DR

Section 143(3)Section 201(1)Section 251(1)(a)Section 40Section 80JSection 92C

…yment made for this purpose was eventually held to be an admissible revenue expenditure. In that case the information supplied was to be surrendered on the termination of the agreement and not to be put to use thereafter. In CIT Vs I.A.E.C (Pumps) Ltd. (1998) 232 ITR 316 (SC), the Hon’ble Supreme Court considered a case in which payment was made for use of patents and designs exclusively in India; the agreement was for a duration of 10 years with the parties having option to extend the agreement; there was a clause for non-disclosure to the third parties. In view of these facts, the Hon’ble Apex Court held that t…

DCIT - 3(2), Mumbai vs. M/S. Kuoni Travels (I) Ltd., Mumbai

In the result, Ground no.5 & 6 of the appeal are dismissed

ITA 1924/MUM/2007[2002-2003]Status: DisposedITAT Mumbai19 Jan 2018AY 2002-2003

Bench: Shri B.R.Baskaran,Accountant Mamber & Shri Pawan Singhdcit 3(3)(1), M/S Sotc Travel Services Pvt. Room No. 609, 6Th Floor, Ltd. (Previously Known As Kuoni Aayakar Bhavan, Travels (India) Pvt. Ltd.),Now Mumbai-400020. Vs. Merged With Travel Corporation (India) Ltd. Kuoni House, N.F. Road, Behind Taj Mahal Hotel, Colaba, Mumbai-400001 Pan: Aaacs0170L (Appellant) (Respondent) M/S Sotc Travel Services Pvt. Dcit 3(3)(1), Room No. 609, 6Th Floor, Ltd. (Previously Known As Kuoni Travels (India) Pvt. Aayakar Bhavan, Ltd.),Now Merged With Travel Mumbai-400020. Corporation (India) Ltd. Kuoni Vs. House, N.F. Road, Behind Taj Mahal Hotel, Colaba, Mumbai-400001 Pan: Aaacs0170L (Appellant) (Respondent)

For Respondent: Shri S. Padmaja CIT –DR with & with Ms Pooja Swaroop ( Sr

Section 253Section 254(1)Section 80HSection 8O

…he relevant provision of law. In support of his submission, the ld. AR of the assessee relied upon the decision of Hon’ble Bombay High Court in Alpha Laval India Ltd. vs. DCIT (266 ITR 418)and the decision of Hon’ble Apex Court in CIT vs. IAEC (Pumps) Ltd. (232 ITR 316). On the other hand, the ld. ITA No.1924 & 2075/M/2007- Kuoni Travels (India) Pvt. Ltd. DR for the Revenue supported the order of authorities below. The ld. DR argued that the assessee made the payment for use of brand for a period of 5½ years. The agreement for use of brand name stipulates that assessee can take over the brand at a price w…

Knight Riders Sports P. Ltd, Mumbai vs. Asst CIT Cen Cir 29, Mumbai

The appeal of the assessee is partly allowed in terms of our aforesaid observations

ITA 1307/MUM/2013[2009-10]Status: DisposedITAT Mumbai29 Dec 2017AY 2009-10

Bench: Shri G.S.Pannu, Am & Shri Ravish Sood, Jm M/S Knight Riders Sports Acit, Central Circle-29, Private Limited, Deepvan बिधम/ Mumbai. Anand Vihar Society, 20Th Vs. Road, Khar (W), Mumbai-400 052 स्थामी रेखा सं./ जीआइआय सं./ Pan No. Aadck3118M (अऩीराथी /Appellant) (प्रत्मथी / Respondent) :

For Appellant: Mr. J.D. Mistry, A.RFor Respondent: Mr. Rajesh Yadav, D.R

Section 143(3)Section 250Section 32(1)(ii)Section 37(1)

…city of payment: The acquisition of capital asset necessarily  involves an upfront payment. In the present case, KRSPL makes an annual payment and more importantly the benefit of the payment does not extend to subsequent years.  CIT Vs. L.A.E.C. (Pumps) Ltd 232 ITR 316 (SC) Where under an agreement with the foreign company, the assessee was granted exclusive licence to use patents and design for 10 years with option to extend or renew agreement and assessee was not to disclose documents to third parties, payment made by assessee to foreign company was to be treated as revenue expenditure. Conclusion In view of…

M/S. I.P. Rings Ltd., Chennai vs. DCIT, Chennai

In the result, the appeals filed by the Revenue in I

ITA 2668/CHNY/2016[2011-12]Status: DisposedITAT Chennai28 Jul 2017AY 2011-12

Bench: Shri Chandra Poojari & Shri Duvvuru Rl Reddy

For Respondent: Shri N. Madhavan, JCIT

…cer has further been directed to allow appropriate depreciation on the 25% capital expenditure in accordance with law and while doing so, the ld. CIT(A) has preferred to follow the above decision, which was pronounced later to that of CIT v. IAEC (Pumps) Ltd. 232 ITR 316 (SC) ( order dated 03.04.1997), which according to him would prevail. 7.1 We have considered the arguments of rival sides and materials on record in the light of precedent relied upon. We have also considered the basis and reasoning as given by the ld. CIT(A) in giving part relief to the assessee. So far as the facts of the case in hand and point…

DCIT, Chennai vs. M/S. I.P. Rings. Ltd., Chennai

In the result, the appeals filed by the Revenue in I

ITA 2584/CHNY/2016[2010-11]Status: DisposedITAT Chennai28 Jul 2017AY 2010-11

Bench: Shri Chandra Poojari & Shri Duvvuru Rl Reddy

For Respondent: Shri N. Madhavan, JCIT

…cer has further been directed to allow appropriate depreciation on the 25% capital expenditure in accordance with law and while doing so, the ld. CIT(A) has preferred to follow the above decision, which was pronounced later to that of CIT v. IAEC (Pumps) Ltd. 232 ITR 316 (SC) ( order dated 03.04.1997), which according to him would prevail. 7.1 We have considered the arguments of rival sides and materials on record in the light of precedent relied upon. We have also considered the basis and reasoning as given by the ld. CIT(A) in giving part relief to the assessee. So far as the facts of the case in hand and point…

DCIT, Chennai vs. M/S. I.P. Rings. Ltd., Chennai

In the result, the appeals filed by the Revenue in I

ITA 2583/CHNY/2016[2011-12]Status: DisposedITAT Chennai28 Jul 2017AY 2011-12

Bench: Shri Chandra Poojari & Shri Duvvuru Rl Reddy

For Respondent: Shri N. Madhavan, JCIT

…cer has further been directed to allow appropriate depreciation on the 25% capital expenditure in accordance with law and while doing so, the ld. CIT(A) has preferred to follow the above decision, which was pronounced later to that of CIT v. IAEC (Pumps) Ltd. 232 ITR 316 (SC) ( order dated 03.04.1997), which according to him would prevail. 7.1 We have considered the arguments of rival sides and materials on record in the light of precedent relied upon. We have also considered the basis and reasoning as given by the ld. CIT(A) in giving part relief to the assessee. So far as the facts of the case in hand and point…

DCIT, New Delhi vs. M/S. Cornell Overseas (P) Ltd., New Delhi

In the result, appeal of the department is dismissed

ITA 2166/DEL/2011[2003-04]Status: DisposedITAT Delhi02 May 2017AY 2003-04

Bench: Sh. N. K. Saini, Am & Smt. Beena Pillai, Jm Ita No. 2166/Del/2011 : Asstt. Year : 2003-04 Dcit, Vs Cornell Overseas (P) Ltd., Circle-3(1), B-235, Okhla Indl. Area, Phase-I, New Delhi New Delhi-110020 (Appellant) (Respondent) Pan No. Aaacc0034F Assessee By : Ms. Vandana Bhandari, Ca Revenue By : Sh. Neeraj Kumar, Sr. Dr Date Of Hearing : 03.02.2017 Date Of Pronouncement : 02.05.2017 Order Per N. K. Saini, Am: This Is An Appeal By The Department Against The Order Dated 28.02.2011 Of Ld. Cit(A)-Xx, New Delhi.

For Appellant: Ms. Vandana Bhandari, CAFor Respondent: Sh. Neeraj Kumar, Sr. DR

Section 143(1)Section 28Section 32Section 80HSection 90C

…nly enlarged range of its existing products were pure findings of fact, and those facts having attained finality, expenditure incurred by assessee was revenue in nature - Held, yes 8.5 Ld. A.R. also relied upon the judgements cited as CIT Vs IAEC (Pumps) Ltd. 232 ITR 316 (S.C.), CIT Vs IAEC (Pumps) Ltd. 110 ITR 353 (Mad.), CIT Vs Steel Plant (P) Ltd. 17 Taxman 301 (Bom.) and CIT Vs Southern Pressings (P) Ltd. 125 Taxman 714 (Mad.). By applying the ratio of judgements cited above relied upon by the Ld. A.R., to the facts and circumstances of the present case, we are of the considered view that 63 Cornell Overseas…

Dci India Ltd., Kolkata vs. DCIT, Cir-10(1) Kolkata, Kolkata

In the result, the appeal of the assessee is allowed

ITA 126/KOL/2017[2010-2011]Status: DisposedITAT Kolkata05 Apr 2017AY 2010-2011

Bench: Shri N. V. Vasudevan & Shri M. Balaganesh, I.T. A.No. 126 /Kol/2017 Assessment Years: 2010-11 Dic India Ltd. Dcit, Cir-10(1), Kolkata -Vs- [Pan :Aabbcc0703C] (Appellant) (Respondent) For The Appellant Sri D. S. Damle, Fca Sri G. Mallikarjuna, Cit, Dr. For The Respondent Date Of Hearing 22.03.2017 Date Of Pronouncement 05.04.2017

Section 143(3)Section 144CSection 263Section 92E

…010-11 M/s. DIC India Ltd. cannot make the annual royalty payments as a percentage of sales to be capital in nature. Attention in this regard is made to the decision of the Apex Court in the case of Commissioner of Income Tax Vs IAEC Pump Limited, reported in 232 ITR 316. The facts and circumstances in that case were identical as those involved in the assessee‟s case. In that case the technical knowhow was licensed to the assessee for a period of 10 years non-transferable basis. The assessee in that case was also not entitled to disclose the documents & information to any third party. The AO treated the payment t…

ACIT, Chennai vs. Ip Rings Ltd., Chennai

In the result, the appeal of the assessee is partly allowed and the Revenue’s appeal is dismissed

ITA 2022/CHNY/2014[2009-10]Status: DisposedITAT Chennai31 Mar 2017AY 2009-10

Bench: Shri N.R.S. Ganesan & Shri D.S.Sunder Singh

For Respondent: Mr.R.Duraipandian, JCIT

…cer has further been directed to allow appropriate depreciation on the 25% capital expenditure in accordance with law and while doing so, the ld. CIT(A) has preferred to follow the above decision, which was pronounced later to that of CIT v. IAEC (Pumps) Ltd. 232 ITR 316 (SC) ( order dated 03.04.1997), which according to him would prevail. 7.1 We have considered the arguments of rival sides and materials on record in the light of precedent relied upon. We have also considered the basis and reasoning as given by the ld. CIT(A) in giving part relief to the assessee. So far as the facts of the case in hand and point…

I.P.Rings Ltd., Chennai vs. DCIT, Chennai

In the result, the appeal of the assessee is partly allowed and the Revenue’s appeal is dismissed

ITA 1670/CHNY/2014[2009-10]Status: DisposedITAT Chennai31 Mar 2017AY 2009-10

Bench: Shri N.R.S. Ganesan & Shri D.S.Sunder Singh

For Respondent: Mr.R.Duraipandian, JCIT

…cer has further been directed to allow appropriate depreciation on the 25% capital expenditure in accordance with law and while doing so, the ld. CIT(A) has preferred to follow the above decision, which was pronounced later to that of CIT v. IAEC (Pumps) Ltd. 232 ITR 316 (SC) ( order dated 03.04.1997), which according to him would prevail. 7.1 We have considered the arguments of rival sides and materials on record in the light of precedent relied upon. We have also considered the basis and reasoning as given by the ld. CIT(A) in giving part relief to the assessee. So far as the facts of the case in hand and point…

Huntsman International (India) P.Ltd, Mumbai vs. DCIT 10(1)(1), Mumbai

The appeal of the assessee is partly allowed, that of Revenue is dismissed

ITA 5637/MUM/2015[2011-12]Status: DisposedITAT Mumbai31 Jan 2017AY 2011-12

Bench: Shri G.S.Pannu & Shri Amarjit Singhm/S.Huntsman International (India) Private Limited, B-Wing, Lighthall, Hiranandani Business Park, Saki Vihar Road, Mumbai 400 072 Pan: Aaach9149J ...... Appellant Vs. The Dcit, 10(1)(1), Mumbai. .... Respondent The Dcit, 10(1)(1), Mumbai. ..... Appellant

For Appellant: Shri S.N.SoparkarFor Respondent: Shri N.K.Chand

Section 143(3)Section 14ASection 271Section 32Section 32(1)(iii)

…that benefit accruing to the assessee from such payment for use of brand was transit in nature, that the assessee did not derive any enduring benefit or any permanent advantage.The assessee referred to the case of CIBA-India Ltd.(69 ITR 692), IAEC Pumps Ltd.(232 ITR 316).Without prejudice to the above,it was contended that if the payments made for brand use was treated as capital asset then depreciation@25% as per the provisions of section 32(1)(ii)of the Act should be allowed. With regard to MSC,it was stated that on acquisition of textile effect business the manufacturing facilities of DDCL were not transferre…

Indiawin Sports P.Ltd, Mumbai vs. Asst CIT Cen Cir 35, Mumbai

In the result, both the appeals of assessee are allowed

ITA 5290/MUM/2014[2009-10]Status: DisposedITAT Mumbai22 Jul 2016AY 2009-10

Bench: Shri R.C.Sharma, Am & Shri Amarjit Singh, Jm आयकर अपील सं./Ita No.5290&5291/Mum/2014 ("नधा"रण वष" / Assessment Year :2009-2010 & 2010-2011) Indianwin Sports Private Vs. Acit, Cc-35, Room Limited, Court House, 3Rd No.104, Aayakar Bhavan, Floor, Lokmanya Tilak Marg, Mumbai-400020 Dhobi Talao, Mumbai- 400002 "थायी लेखा सं./जीआइआर सं./Pan/Gir No. : Aadcr 8195 F .. (अपीलाथ" /Appellant) (""यथ" / Respondent) "नधा"रती क" ओर से /Assessee By : Shri Arvind Sonde राज"व क" ओर से /Revenue By : Shri B.C.S.Naik सुनवाई क" तार"ख / Date Of Hearing : 25/05/2016 घोषणा क" तार"ख/Date Of Pronouncement 22/07/2016 आदेश / O R D E R Per R.C.Sharma (A.M): These Are The Appeals Filed By The Assessee Against The Order Of Cit(A), Mumbai, For The Assessment Years 2009-2010 & 2010-2011, In The Matter Of Order Passed U/S.143(3) Of The I.T.Act. 2. In Both These Appeals The Assessee Is Aggrieved For Decline Of Annual Payment Being Franchise Fees Paid To Bcci To Participate In The Indian Premier League (Ipl) By Holding The Same As Capital In Nature For Both The Assessment Years Under Consideration. 3. Rival Contentions Have Been Heard & Record Perused. Facts In Brief Are That The Assessee Is Engaged In The Business Of Owning, Managing & Operating 'Mumbai Indian' Team Of Indian Premier League (Ipl). The Assessee Has Been Granted Perpetual Franchisee For The 'Mumbai Indian' Team. The Assessee Is Franchise Holder Of Ipl I.E. Indian

For Appellant: Shri Arvind SondeFor Respondent: Shri B.C.S.Naik

Section 139Section 143(3)

…know how and right to use technical know how ceases on the termination of such agreement, then the annual payments made are revenue in character and are allowable as deductible expenditure. The Hon'ble Supreme Court in the case of CIT v. LA.E.C. (Pumps) Ltd, 232 ITR 316 (sq held that use of patents and designs for ten years with option to extend or renew the same was held to be a revenue expenditure. The ratio is fully applicable to the facts of the present case. (ii) Similarly, in case of other assets also which are normally treated as fixed assets entitled to depreciation, if an assessee takes these assets on…

ACIT, New Delhi vs. M/S. Ge Capital Business Process Management Services Pvt. Ltd., New Delhi

In the result, the appeal of the assessee is allowed and that of Revenue is dismissed

ITA 2124/DEL/2013[2008-09]Status: DisposedITAT Delhi16 Oct 2015AY 2008-09

Bench: : Shri I.C. Sudhir & Shri L.P. Sahu

For Appellant: Shri Sanjeev Sabharwal, Sr. AdvFor Respondent: Shri A.K. Saroha, CIT/DR

Section 32Section 37

…Asahi India Safety Glass Ltd. 203 Taxman 277 (Del.) (ii). SLP(C)CC No. 10108/2012 CIT vs. M/s. Asahi Safety Glass Ltd. (iii). Empire Jute Company vs. CIT, 124 ITR 1 (SC) (iv). CIT vs. Amway India Enterprises, 346 ITR 341 (Del.) (v). CIT vs. IAEC (Pumps) Ltd., 232 ITR 316 (SC) (vi). DCIT vs. Eicher Motors Ltd., 53 Taxman 317 (Delhi Tri.) (vii). CIT vs. Modi Revlon (P) Ltd., 26 Taxman.com 133 (Del.) (viii). CIT vs. G4S Securities System (India) Ltd., 338 ITR 46 (Del) He also contended that the learned CIT(A) in the subsequent assessment years 2008-09, 2010-11 and 2011-12 has decided the issue on the basis of same e…