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Documents citing Commissioner Of Income Tax, Tamil ... vs Southern Switchgear Ltd. on 29 March, 1983

Fenner (India) Ltd., Madurai vs Assessee on 19 March, 2012

10. We are inclined to follow the decision of the Hon'ble Jurisdictional High Court in the case of CIT vs. Southern Switchgear Ltd. (supra), which was affirmed by the Hon'ble Supreme Court in the case of Southern Switchgear Ltd. vs. CIT (supra) and therefore, we see no reason to interfere with the reasoning of the CIT(A), which is well founded and is in accordance with the law laid down by the Hon'ble Jurisdictional High Court and the 10 I.T.A. Nos Nos. 722 & 1047/M/09 Hon'ble Supreme Court. Accordingly, we dismiss the grounds of appeal of the assessee on this issue.
Income Tax Appellate Tribunal - Chennai Cites 11 - Cited by 0 - Full Document

Dcit, Circle-10(1), Kolkata, Kolkata vs M/S. Dic India Ltd, Kolkata on 3 May, 2019

14. The ld. DR submitted that the order of the tribunal relied upon by the ld. Counsel needs a re-look because the decision of the Hon'ble Madras High Court in the case of CIT vs Southern Switchgear Ltd had not been appreciated. He further submitted that a new advantage and acquisition of capital asset by the assessee existed in the present case. The assessee had enduring benefit and has functionally gained advantage and these facts ought to have prompted the tribunal to come to a conclusion that expenditure in question was capital in nature.
Income Tax Appellate Tribunal - Kolkata Cites 10 - Cited by 0 - Full Document

Frick India Ltd, vs Dcit Circle-11 (1), on 30 December, 2021

Insofar the reliance placed by the CIT(A) on the judgment of the Hon'ble High Court of Madras in the case of CIT Vs. Southern Switchgear Ltd, 148 ITR 272 (which thereafter had been upheld by the Hon'ble Supreme Court in CIT Vs. Southern Switchgear Ltd 232 ITR 359), which in turn had relied on its earlier judgment in the case of Transformer and Switchgear Ltd. Vs. CIT, 103 ITR 352, we find that the facts involved in the latter case are totally distinguishable as against those involved in the case of the assessee before us. Unlike the present case wherein the fees for technical know-how had been paid by the assessee company, viz.
Income Tax Appellate Tribunal - Delhi Cites 43 - Cited by 0 - G S Pannu - Full Document

Dic India Ltd, Kolkata vs Dcit, Circle-10(1), Kolkata, Kolkata on 14 February, 2018

14. The ld. DR submitted that the order of the tribunal relied upon by the ld. Counsel needs a re-look because the decision of the Hon'ble Madras High Court in the case of CIT vs Southern Switchgear Ltd had not been appreciated. He further submitted that a new advantage and acquisition of capital asset by the assessee existed in the present case. The assessee had enduring benefit and has functionally gained advantage and these facts ought to have prompted the tribunal to come to a conclusion that expenditure in question was capital in nature.
Income Tax Appellate Tribunal - Kolkata Cites 12 - Cited by 0 - Full Document

Nefab India P.Ltd, Gurgaon vs Dcit, Circle-3(1), Gurgaon on 31 March, 2022

9.2. Under these circumstances, we find considerable merit in the plea of the assessee for claiming the entire royalty expenditure for use of technical know-how as revenue expenditure. We also find that the judgment rendered by the Hon'ble Madras High Court in the case of CIT vs. Southern Switchgear Ltd., reported in 148 ITR 273 (Mad) as affirmed by Hon'ble Supreme Court, reported in 232 ITR 259 (SC) weighed in the mind of CIT(A) is in different factual backdrop with real difference. In that case, the assessee was entitled to use the benefit flowing from license even after the termination of license agreement. This feature is the dividing line I.T.A. No.1338/DEL/2018 7 for inapplicability of decision in Southern Switchgear. Hence, there is no scope of treating the royalty paid for the 'licensed information' as capital expenditure in the facts of the case.
Income Tax Appellate Tribunal - Delhi Cites 3 - Cited by 0 - Full Document

Dci India Ltd., Kolkata vs Dcit,Cir-10(1) Kolkata, Kolkata on 5 April, 2017

The aforesaid decision of Hon‟ble Calcutta High Court is squarely applicable to the facts of the instant case on merits. We find that the decision of the Hon'ble Madras High Court in the case of CIT vs Southern Switchgear Ltd reported in (1984) 148 ITR 273 (Mad) does not come to the rescue of the revenue as in that case, it was categorically found that in addition to the acquisition of technical knowledge, the assessee company got an exclusive right to manufacture and sell its articles without any objection from anyone including the foreign company and this is clearly an advantage of enduring nature. It was further observed in that case that it is well established that even without acquisition of an asset, a right of a permanent advantage could. be acquired and the cost of acquisition of such a right could. be taken to be capital expenditure. In the instant case, the assessee shall not be entitled to use the Licensed Information and it had to deliver up to its AE all such Licensed Information in tangible form which may then be in its possession and will keep no copies thereof. Moreover, assessee in the instant case was given by its AE only a non-exclusive and non-transferable license to use Licensed Information for manufacture of products. Assessee was not granted any right to sublicense to any third parties or make available any licensed information to any third parties and is also directed to maintain the secrecy and confidentiality of the licensed information by not disclosing to any third party and such secrecy & confidentiality clause shall be binding even after termination of the agreement for ten years. Hence it is a restrictive usage privilege given to the assessee in the 28 I.T.A.No. 126 /Kol/2017 Assessment Years: 2010-11 M/s. DIC India Ltd.
Income Tax Appellate Tribunal - Kolkata Cites 32 - Cited by 1 - Full Document

Commissioner Of Income-Tax vs Chemicals And Plastics (I) Ltd. on 14 February, 1989

In CIT v. Southern Switchgear Ltd. [1984] 148 ITR 272 (Mad), the assessee, under the terms of a collaboration agreement entered into with a foreign company, paid a lump sum, though in five equal instalments, and claimed deduction of such payment as revenue expenditure, one-fourth or which was disallowed by the Income-tax Officer on the ground that such payment secured an enduring benefit to the company and this was also affirmed on appeal by the Appellate Assistant Commissioner as well as the Tribunal. On a reference to this court, it was held, on a consideration of the clauses of the agreement in that case, that the assessee obtained, through the agreement, an enduring advantage and benefit and such benefit was available to the assessee for its manufacturing and industrial processes and the exclusive right of manufacture conferred on the assessee should be considered as an independent right secured by the assessee from the foreign company, which was of an enduring nature and, therefore, the Tribunal was right in the view it took that 25% of the technical and aid fees has to be regarded as being capital in nature. It was also further pointed out that the royalty payment resulted in the acquisition of an exclusive privilege of manufacturing and selling of products and the acquisition of such a right was rightly regarded by the Department and the Tribunal as partly towards capital and partly towards revenue. On the terms of the agreement in this case, it is seen that there is no question of the assessee having secured, by the payment of royalty, any exclusive privilege of either the manufacture of the sale of the products and that would suffice to distinguish that decision from the present one, and, therefore, that decision would be inapplicable here.
Madras High Court Cites 9 - Cited by 16 - Full Document

The Commissioner Of Income-Tax, ... vs M/S. Advanta India Ltd., Secunderabad on 9 October, 2015

In the context of the guidance provided in those judgments, we may consider the arguments advanced before us. At this stage, we may note that the CIT Appeals itself did not agree with the views of the assessing officer in entirety and however found that only a small portion of the expenditure could be treated as capital in nature by applying the principles laid down in the case of Southern Switchgear Limited (2 supra) whereas the assessee had relied on the judgment reported in a case of CIT vs. I.A.E.C (Pumps) Ltd as more appropriate. All the cases ultimately emphasis as a rule, the analysis and proper understanding of the agreement between the parties as providing a correct picture with respect to the aspect as to how a particular expenditure is to be treated. In the case on hand, we had set out the findings as recorded by the Tribunal in the earlier paragraphs. In the present case, there is no challenge to the findings recorded by the Tribunal by raising a question of perversity of a fact. In view of the settled principles of law, the questions raised before us are required to be considered and answered on the facts as found and recorded by the Tribunal.
Andhra HC (Pre-Telangana) Cites 25 - Cited by 0 - K R Challa - Full Document

Faurecia Emission Control ... vs Dcit Corporate Circle 2(1), Chennai on 23 April, 2019

7. It is contended that the royalty payment was only for the purpose of use of technical information in the manufacture and sale of the products. The proprietary ownership rights in the know-how never vested with Sango Co. Ltd., Japan and Faurecia Systems Dechappement, France at all the time there is no parting know-how in favour of the assessee resulting in the acquisition of any asset no benefit of any enduring nature had accrued to the appellant. It is further stated that the ratio of the decision of Hon'ble Jurisdictional High Court in the case of Southern Switchgear Ltd. (supra) is not applicable to the facts of the present case as no lump sum payment was made and the payment of royalty was made in terms of percentage of the sales. On the other hand, the ld. Sr. Departmental Representative placed reliance on the orders of lower authorities.
Income Tax Appellate Tribunal - Chennai Cites 13 - Cited by 0 - Full Document

Commissioner Of Income-Tax vs Carburettors Ltd. on 7 December, 1995

In order to support the contention that the expenditure incurred by the assessee in the present case is capital in nature, reliance was placed on a decision of this court rendered in the case of CIT v. Southern Switchgear Ltd. [1984] 148 ITR 272. According to the facts arising in this case, the assessee-company entered into a collaboration agreement with a foreign company under the terms of which the foreign company agreed to provide the assessee-company technical aid and information in the manufacture of switchgears and the right to sell such products. The foreign company also agreed to keep the Indian company posted with the latest and modern developments in the field of manufacture of switchgears and transformers and to train the necessary personnel at its U.K. factory. Under the terms of the agreement, the assessee-company agreed to pay to the foreign company as consideration for the services rendered by it a lump sum payable in five equal instalments, the payment to be spread over a period of time. For the assessment year 1966-67, the assessee claimed over a period of time. For the assessment year 1966-67, the assessee claimed deduction of the payment made to the foreign company as a revenue expenditure. While considering these facts, this court held that a perusal of the various clauses of the agreement clearly indicated that the technical knowledge that the assessee obtained through the agreement with the foreign company secured to the assessee an enduring advantage and benefit in that the same was available to the assessee for its manufacturing and industrial process even after the termination of the agreement. The foreign company had also agreed not to manufacture in India any of the products in question or grant or make available to any other person any information relating to manufacture, licence or rights, for any of the products in question in India thereby conferring on the assessee exclusive right of manufacture and the sale of the products. Thus on an appraisal of the facts arising in this case this court held that 25 per cent. of the expenditure incurred by the assessee would be capital in nature since the assessee derived enduring benefit by the acquisition of the right under the agreement.
Madras High Court Cites 8 - Cited by 2 - T J Chouta - Full Document
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