Law: Income Tax Act, 1961

Section: 37(1)

Section 37(1) of the Income-tax Act, 1961 - Business expenditure - Allowability of (Technical fee) - Assessment year 2002-03 - Whether technical fees paid by assessee to japanese parent company was allowable as business expenditure under section 37(1) - Held, yes [Para 3] [In favour of assessee] Section 37(1) of the Income-tax Act, 1961 - Business expenditure - Allowability of (Royalty) - Assessment year 2002-03 - Whether where consistently for 12 years identical payments were treated as revenue expenditure and no new fact or development took place or was taken into account by Assessing Officer, royalty paid by assessee to its Japanese parent company was to be held as revenue expenditure and could not be treated as capital expenditure - Held, yes [Para 4] [In favour of assessee] Section 37(1) of the Income-tax Act, 1961 - Business expenditure - Allowability of (Intranet facility) - Assessment year 2002-03 - Assessee made certain payment to its parent company for use of intranet facility which was a communication network - Said network was availed on cost sharing basis for reporting and communication - Whether since it was an actual payment in respect of service availed by assessee, same would be an allowable expenditure - Held, yes [Para 5] [In favour of assessee] Section 32, read with section 35AB, of the Income-tax Act, 1961 - Depreciation - Allowance/Rate of (Technical knowhow expenses) - Assessment year 2002-03 - Whether where depreciation under section 32(1) was available in respect of an amount claimed by assessee, merely because assessee sought benefit under section 35AB earlier, could not be only reason to deny same - Held, yes [Para 8] [In favour of assessee] CASE REVIEW CIT v. Denso India (P.) Ltd. [2012] 344 ITR 566/[2010] 195 Taxman 434/8 taxmann.com 48 (Delhi) (para 3) followed. Asstt. CIT v. Denso India Ltd. [2013] 33 taxmann.com 89 (Delhi - Trib) (para 9) affirmed. CASES REFERRED TO Asstt. CIT v. Denso India Ltd. [2013] 33 taxmann.com 89/[2014] 64 SOT 191 (Delhi - Trb.) (URO) (para I) and CIT v. Denso India Ltd. [2013] 344 ITR 566/[2010] 195 Taxman 434/[2010] 8 taxmann.com 48 (Delhi) (para 3). JUDGMENT S. Ravindra Bhat, J. - The revenue has…

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