Madras High Court
The Pr. Commissioner Of Income Tax – vs M/S.Indian Additives Limited on 3 October, 2024
Author: R. Suresh Kumar
Bench: R. Suresh Kumar, C. Saravanan
T.C.A.Nos.213 to 215 of 2024
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 03.10.2024
CORAM :
THE HONOURABLE MR.JUSTICE R. SURESH KUMAR
AND
THE HONOURABLE MR.JUSTICE C. SARAVANAN
T.C.A.Nos.213 to 215 of 2024
The Pr. Commissioner of Income Tax – 1
Chennai. .. Appellant in all TCAs
Vs.
M/s.Indian Additives Limited
Express Highway, Manali
Chennai – 600 068 Respondent
PAN: AAACI-1445-G .. in all TCAs
Prayer in T.C.A.No.213 of 2024: Appeal filed under Section 260A of
the Income Tax Act, 1961, against the order of the Income Tax
Appellate Tribunal, Madras "D" Bench, Chennai dated 19.05.2023 in
I.T(TP).A.No.9/Chny/2018;
Prayer in T.C.A.No.214 of 2024: Appeal filed under Section 260A of
the Income Tax Act, 1961, against the order of the Income Tax
Appellate Tribunal, Madras "D" Bench, Chennai dated 19.05.2023 in
I.T(TP).A.No.11/Chny/2018; and
Prayer in T.C.A.No.215 of 2024: Appeal filed under Section 260A of
the Income Tax Act, 1961, against the order of the Income Tax
Appellate Tribunal, Madras "D" Bench, Chennai dated 19.05.2023 in
I.T(TP).A.No.10/Chny/2018.
https://www.mhc.tn.gov.in/judis
Page 1 of 5
T.C.A.Nos.213 to 215 of 2024
For the Appellant Mr.T.Ravi Kumar
in all T.C.As : Senior Standing Counsel
For the Respondent Mr.I.Dinesh
in all T.C.As : for Mr.G.Baskar
COMMON JUDGMENT
(Order of the Court was made by R.SURESH KUMAR, J.)
The substantial questions of law raised in T.C.A.Nos.213 and
214 of 2024 are:-
(i) Whether on the facts and circumstances of the
case the Tribunal was justified in holding that the
TDS and R&D Cess Payment made on Royalty by
the Assessee to its Associate Enterprise is neither
a tax nor a duty levied on the profits of the
Assessee, but was an expenditure incurred by the
Assessee for payment of a royalty which was
revenue in nature even though the same was
capital as per explanation (4) to Section 32(1) as
it falls under the category of intangible assets?
(ii) Whether on the facts and circumstances of the
case the Tribunal was right in holding that R&D
Cess payment made on royalty by the Assessee to
its Associate enterprise is an allowable
expenditure ignoring the statutory provisions
contained in Section 40(a)(ii) of the IT Act, 1962?
https://www.mhc.tn.gov.in/judis
T.C.A.Nos.213 to 215 of 2024
2. The substantial questions of law raised in T.C.A.No.215 of
2024 are:-
(i) Whether on the facts and circumstances of the
case the Tribunal was justified in treating the
royalty payment made to M/s Chevorn Oronite
CO, LLC, USA as Revenue expenditure especially
when the Assessee is enjoying an enduring benefit
since the payments were made for infusion of New
Technology which aided the Assessee in its
manufacturing activity?
(ii) Is not reasoning and finding of the Tribunal
bad and perverse by holding Royalty payment
made was Revenue expenditure especially when
the Assessee got exclusive right to manufacture
and sell the products using the license technology
which gives a benefit of enduring nature and
therefore Capital in nature?
(iii) Whether on the facts and circumstances of the
case the Tribunal was justified in holding that the
TDS and R&D Cess Payment made on Royalty by
the Assessee to its Associate Enterprise is neither
a tax nor a duty levied on the profits of the
Assessee, but was an expenditure incurred by the
Assessee for payment of a royalty which was
revenue in nature even though the same was
https://www.mhc.tn.gov.in/judis
T.C.A.Nos.213 to 215 of 2024
capital as per explanation (4) to Section 32(1) as
it falls under the category of intangible assets?
(iv) Whether on the facts and circumstances of
the case the Tribunal was right in holding that
R&D Cess payment made on royalty by the
Assessee to its Associate enterprise is an
allowable expenditure ignoring the statutory
provisions contained in Section 40(a)(ii) of the IT
Act, 1962?
3. It is submitted by Mr.T.Ravi Kumar, learned Senior
Standing Counsel appearing for the appellant Revenue that all these
Tax Case Appeals are covered under the Low Tax Effect as per the
recent Circular dated 17.09.2024, in Circular No.9/2024.
4. Recording the same, these appeals stand dismissed as Low
Tax Effect. The questions of law raised in these appeals are kept
open to be decided at the later point of time. There shall be no
order as to costs. Consequently, C.M.P.Nos.21266 and 21269 of
2024 are closed.
(R.S.K., J.) (C.S.N, J)
03.10.2024
Neutral Citation:Yes/No
drm
https://www.mhc.tn.gov.in/judis
T.C.A.Nos.213 to 215 of 2024
R. SURESH KUMAR, J.
AND
C. SARAVANAN, J.
(drm)
T.C.A.Nos.213 to 215 of 2024
03.10.2024
https://www.mhc.tn.gov.in/judis
