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Glaxo Smithkline Asia (P) Ltd. vs Assistant Commissioner Of Income Tax on 19 August, 2005 cites

Commissioner Of Income-Tax, Bombay vs M/S. Walchand & Co. (Pvt.) Ltd., Bombay on 17 March, 1967

"Rival submissions of the parties have been considered carefully in the light of materials placed before us, as well as the case law referred to. The question before our consideration is whether the lower authorities were justified in disallowing the expenses incurred in marketing of its products. Admittedly, the assessee-company does not have any infrastructure of its own and, therefore, it had entered into an agreement with SBCH under which SBCH was required to provide the entire network for marketing the assessee's products. It was felt by both the parties that reimbursement of expenditure coupled with commission on sale were not adequate to cover the entire expenditure and, therefore, it was decided to ascertain the suitable criteria for reimbursement of the expenses incurred by SBCH. Accordingly, PWC was appointed to make an in-depth study to find a suitable criteria in respect of the expenditure incurred by SBCH. It is on this basis PWC made the study and prepared a report along with the formula under which suitable payments were to be made by the assessee to SBCH regarding the marketing of assessee's products. In our opinion, this was a bona fide exercise made by the parties. Under such circumstances, the question is whether the AO could reject such report and determine the expenditure which the assessee ought to have paid to SBCH. At this stage, it would be appropriate to refer to the judgment of Hon'ble Supreme Court in the case of CIT v. Walchand and Co. (P) Ltd. (1967) 65 TTR 381 (SC) wherein it was held as under :
Supreme Court of India Cites 6 - Cited by 303 - J C Shah - Full Document

Berger Paints India Ltd vs Commissioner Of Income Tax, Calcutta on 17 February, 2004

The AO had placed reliance on the decision of the Hon'ble Supreme Court in the case of Berger Paints (supra) wherein it had held that excise duty was to be included in the valuation of closing stock of finished goods. The AO has overlooked the fact that by including the excise duty in the valuation of the closing stock, deduction for the said duty is not allowed to that extent as required under Section 43B of the Act. The disallowance made by the AO and confirmed by the CIT(A) cannot be sustained and is, therefore, directed to be deleted. Ground Nos. 1.21 to 1.23 in ITA No. 819/Del/2005 are allowed.
Supreme Court of India Cites 14 - Cited by 173 - Full Document

M/S Madras Industrial ... vs The Commissioner Of Income Tax,Tamil ... on 4 April, 1997

The AO was of the view that from the nature of expenditure, it was apparent that it related to decision-making for long-term planning, since it relates to T.P. research to assess the effectiveness of the advertisements aired, retailer audit and household panel researches to assess brand presence and such other methods to keep track on brands presence marking, etc., formulate future strategies. He was of the view that this expenditure ought not to have been clubbed under the head advertisement and publicity. Since the expenditure resulted in an enduring benefit to the assessee, the AO was of the view, that only 1/5th expenditure should be allowed as deduction and the balance should be carried forward and allowed in the following four years in equal instalments. The AO also made a reference to the decision of the Supreme Court in the case of Madras Industrial Investment Corporation Ltd. v. CIT wherein the concept of deferred revenue expenditure had been accepted by the Hon'ble Supreme Court.
Supreme Court of India Cites 16 - Cited by 445 - Full Document

Surendra Engineering Corporation vs Assistant Commissioner Of Income Tax on 12 December, 2002

The Special Bench of Tribunal in Surendra Engineering Corpn. v. Asstt. CIT (2003) 78 TTJ (Mumbai)(SB) 347 : (2003) 86 ITD 121 (Mumbai)(SB) held that indirect costs which are not attributable to export turnover of trading goods should not be taken into consideration. It is clear from the aforesaid order of the Tribunal that for the purpose of computing deduction under Section 80HHC, indirect costs related to the export of trading goods is to be apportioned and not all costs other than direct costs have to be prorated to arrive at the indirect costs that have to be reduced. It is only those costs which have some relation to the export of trading goods that need to be allocated. The AO is, therefore, directed to recompute the deduction under Section 80HHC of the Act in respect of trading goods by excluding from the indirect expenses, such expenses not related to the export of trading goods.
Income Tax Appellate Tribunal - Mumbai Cites 6 - Cited by 8 - Full Document

Commissioner Of Income-Tax vs Bangalore Clothing Co. on 15 January, 2003

From a reading of the aforesaid provisions, it is clear that royalty income is not income of the nature of brokerage, commission, interest, rent or charges. The royalty income is clearly in the nature of profits and gains of business. The royalty income is not receipt of a similar nature as that of brokerage, commission, etc. The expression "of any other receipt of a similar nature" occurring in Clause (1) of Expln. (baa) has to be construed ejusdem generis with the words appearing immediately preceding that expression. The plea of the assessee also finds support from the decision of the Hon'ble Bombay High Court in the case of CIT v. Bangalore Clothing Co. and the Delhi Bench of the Tribunal in the case of Smt. Sujatha Grover v. Dy. CIT (2002) 74 TTJ (Del) 347. The action of the Revenue authorities in excluding 90 per cent of royalty income cannot, therefore, be sustained. The AO is, therefore, directed to recompute the income under Section 80HHC by considering the royalty income as profits of the business.
Bombay High Court Cites 12 - Cited by 89 - S H Kapadia - Full Document

Smt. Sujata Grover vs Deputy Cit on 5 November, 2001

From a reading of the aforesaid provisions, it is clear that royalty income is not income of the nature of brokerage, commission, interest, rent or charges. The royalty income is clearly in the nature of profits and gains of business. The royalty income is not receipt of a similar nature as that of brokerage, commission, etc. The expression "of any other receipt of a similar nature" occurring in Clause (1) of Expln. (baa) has to be construed ejusdem generis with the words appearing immediately preceding that expression. The plea of the assessee also finds support from the decision of the Hon'ble Bombay High Court in the case of CIT v. Bangalore Clothing Co. and the Delhi Bench of the Tribunal in the case of Smt. Sujatha Grover v. Dy. CIT (2002) 74 TTJ (Del) 347. The action of the Revenue authorities in excluding 90 per cent of royalty income cannot, therefore, be sustained. The AO is, therefore, directed to recompute the income under Section 80HHC by considering the royalty income as profits of the business.
Delhi High Court Cites 22 - Cited by 21 - Full Document
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