Case Law Details
Transstory (India) Ltd. Vs ITO (ITAT Visakhapatnam) – The taxpayer was to pay royalty for only seven years and in respect of certain specified product, the royalty payable by the two group companies in China was for 20 years and it was based on sales of all the products. The only basis of adjustment made by the TPO is variation in rates of royalty paid by the taxpayer vis-a-vis the two group companies in China.
In the case of R&D cess on royalty, the CIT(A) had given a categorical finding that under Section 3(2) of Research and Development Cess Act, 1986 the cess was payable to the Central Government by an industrial concern which imports technology. There was no material to controvert the above finding and R&D cess liability was payable by the taxpayer who imports technology. The Tribunal upheld the decision given by CIT(A) relating to adjustment on account of payment of R&D cess. The Tribunal held that the royalty calculation, and the period for which the royalty was paid by the taxpayer was materially different from that of the two group companies of the JV partner, and thus the adjustment should be deleted.
M/s. Transstory (India) Ltd. Vs ITO
Decided by- ITAT Visakhapatnam
ITA No. 540/Vizag/2009
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