Tags

, , ,

inz-fiserv-140303-34

Where assessee-company made payment of royalty to its AE for mere use of trademark, that too by means of non-exclusive licence, it was to be allowed as revenue expenditure while determining ALP.
Assessee-company (GKN Driveline (India) Ltd.) was engaged in business of manufacture and sale of Constant Velocity Joints (CVJ) – During relevant year, assessee made payment of royalty to AE for use of its trademark in respect of manufactured products – In transfer pricing proceedings, TPO taking a view that payment in question was capital in nature, disallowed same and made certain addition to assessee’s ALP – It was noted that Tribunal in assessee’s own case relating to earlier assessment year, opined that assessee did not acquire any ownership right in trademarks by paying amount of royalty – It was further noticed that royalty was paid simply for use of trademarks, and that too tax consultancy firms in delhi, by means of a non-exclusive license – Tribunal had thus concluded that royalty payment was to be allowed as revenue expenditure – Whether in absence of any change in circumstances, following aforesaid order of Tribunal, impugned disallowance was to be deleted – Held, yes [In favour of assessee].

Companies With More Than 10 Times of Turnover of Assessee Couldn’t be Selected as Comparables.

Assessee-company (Acusis Software India (P.) Ltd.) was rendering ITES to its AE – Whether companies providing KPO services cannot be considered as comparable – Held, yes – Whether companies having turnover in excess of 10 times of turnover of assessee could not be selected as comparable – Held, yes – Whether companies having employees’ cost of less than 25 per cent were incomparable to assessee – Held, yes [Partly in favour of assessee] in chartered accountant firms in mumbai

Get more information visit at: http://bit.ly/2ka0GoH

Advertisements