CIT v. IAEC (Pumps) Ltd.

232 ITR 316Supreme Court of India1998#2502 most cited

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.

46

judgments rely on this decision, according to BharatTax’s citation analysis of 366,339 Indian tax judgments — from 2012 to 2023.

Also referred to as

CIT v. IAEC (Pumps) Ltd. · IAEC Pumps · section 37 · section 37(1) · royalty payment · revenue expenditure · capital expenditure · enduring benefit test · license fees · use of patents and designs · allowability of expenditure

Issues it is cited on

section 35(2ab)csr expenditureweighted deductionsection 10(34)enduring benefitsection 32revenue expenditurecapital expendituresection 92casection 14asection 37(1)section 37

Judgments citing CIT v. IAEC (Pumps) Ltd.

Oracle India Pvt. Ltd vs. Commissioner of Income Tax, Delhi

ITA/461/2009HC Delhi25 Nov 2013

Bench: HON'BLE MR. JUSTICE SANJIV KHANNA,HON'BLE MR. JUSTICE SANJEEV SACHDEVA

…ut first ascertaining and determining whether enduring benefit test is satisfied or not. The enduring test may not be the sole, exclusive or universal test but is considered to be the primary test. 31. The Supreme Court in CIT versus lAEC Pumps limited (1998) 232 ITR 316 upheld the decision of the tribunal that payment towards royalty was revenue expenditure and was allowable after observing that the licence for use of patents and designs was for a duration of 10 years with the parties having option to renew or extend the licence. The assessee had been only allowed use and there was no transfer of rights. The rig…

Oracle Software India Ltd vs. Commissioner of Income Tax Del

ITA/961/2006HC Delhi25 Nov 2013

Bench: HON'BLE MR. JUSTICE SANJIV KHANNA,HON'BLE MR. JUSTICE SANJEEV SACHDEVA

…ut first ascertaining and determining whether enduring benefit test is satisfied or not. The enduring test may not be the sole, exclusive or universal test but is considered to be the primary test. 31. The Supreme Court in CIT versus lAEC Pumps limited (1998) 232 ITR 316 upheld the decision of the tribunal that payment towards royalty was revenue expenditure and was allowable after observing that the licence for use of patents and designs was for a duration of 10 years with the parties having option to renew or extend the licence. The assessee had been only allowed use and there was no transfer of rights. The rig…

Oracle India Pvt. Ltd vs. Commissioner of Income Tax, Delhi

ITA/447/2009HC Delhi25 Nov 2013

Bench: HON'BLE MR. JUSTICE SANJIV KHANNA,HON'BLE MR. JUSTICE SANJEEV SACHDEVA

…ut first ascertaining and determining whether enduring benefit test is satisfied or not. The enduring test may not be the sole, exclusive or universal test but is considered to be the primary test. 31. The Supreme Court in CIT versus lAEC Pumps limited (1998) 232 ITR 316 upheld the decision of the tribunal that payment towards royalty was revenue expenditure and was allowable after observing that the licence for use of patents and designs was for a duration of 10 years with the parties having option to renew or extend the licence. The assessee had been only allowed use and there was no transfer of rights. The rig…

Oracle India Private Limited vs. Commissioner of Income Tax

ITA/25/2012HC Delhi25 Nov 2013

…ascertaining and determining whether enduring benefit test is satisfied or not. The enduring test may not be the sole, exclusive or universal test but is considered to be the primary test. 31. The Supreme Court in CIT versus IAEC Pumps limited (1998) 232 ITR 316 upheld the decision of the tribunal that payment towards royalty was revenue expenditure and was allowable after observing that the licence for use of patents and designs was for a duration of 10 years with the parties having option to renew or extend the licence. The assessee had been only allowed use and there was no transfer of rights.…

CIT vs. Ekl Appliances Ltd

ITA - 1069 / 2011HC Delhi22 Feb 2012
Section 260ASection 263

…he aforesaid conclusion of the tribunal is in accord with the decision of the Supreme Court in CIT versus Ciba of India Limited, (1968) 69 ITR 692 (SC) and their subsequent decision in the Commissioner of Income Tax versus I.A.E.C. (Pumps) Limited, (1998) 232 ITR 316 (SC). Referring to these decisions, a Division Bench of this Court in Commissioner of Income Tax versus G4S. Securities System (India) (P) Limited, (2011) 338 ITR 46, has held as under:- “9. From the terms of the agreement it is noticed that this arrangement was for a period of 5 years, which may be extended by another period of 5 years…

ITA 1069/2011 vs. Ekl Appliances Ltd

ITA/1069/2011HC Delhi22 Feb 2012
Section 260ASection 263

…he aforesaid conclusion of the tribunal is in accord with the decision of the Supreme Court in CIT versus Ciba of India Limited, (1968) 69 ITR 692 (SC) and their subsequent decision in the Commissioner of Income Tax versus I.A.E.C. (Pumps) Limited, (1998) 232 ITR 316 (SC). Referring to these decisions, a Division Bench of this Court in Commissioner of Income Tax versus G4S. Securities System (India) (P) Limited, (2011) 338 ITR 46, has held as under:- “9. From the terms of the agreement it is noticed that this arrangement was for a period of 5 years, which may be extended by another period of 5 years…