C I T Vs. ACQUA MINERALS P LTD

JUDGEMENT

(1.) THE following question has been referred by the Income Tax Appellate Tribunal, Ahmedabad Bench 'A' under Section 256(1) of the Income Tax Act, 1961 arising out of the Tribunal's order dated 01.10.1997 in ITA No. 3304/Ahd/1992 for the assessment year 1989 -90.: "Whether the Appellate Tribunal is right in law and on facts in confirming the order passed by the CIT(A) deleting the disallowance of Rs. 2,90,602/ - made under the provision of Section 35A -

(2.) THE Assessing Officer during the assessment proceedings noted that the assessee had claimed a sum of Rs. 2,90,602/ - as royalty payment made to M/s. Parle (Export) Pvt. Ltd for use of their trade mark 'Bisleri'. The Assessing Officer on such basis held that the payment was for the acquisition of 'patent right' and therefore he restricted the allowance to 1/4th of the total claim of Rs. 2,90,602/ - u/s 35A. On appeal, the CIT(A) deleted the disallowance on account of royalty. The revenue appealed before the Tribunal. The Tribunal upheld the findings of the CIT(A) and confirmed the order.

(3.) MR . Nitin Mehta, learned advocate for the revenue strongly urged that the order of both the authorities below are perverse and against the principles enunciated under section 35A. He has drawn our attention to the provisions of section 35A of the Act and submitted that the order passed by the Assessing Officer is just and proper.