| The Tax Publishers2020 TaxPub(DT) 1719 (SC) : (2020) 271 TAXMAN 0027 INCOME TAX ACT, 1961
Section 261 Section 37 Section 48
Where the department preferred SLP to appeal against the judgment of Delhi High Court in Pr. CIT v. Nitrex Chemicals India Ltd. (2016) 43 Taxman 371 (Del-HC) : 2016 TaxPub(DT) 4900 (Del-HC), whereby the High Court held that i since transferee had disclaimed any responsibility to honour ESOP conditions funding of Fund became integral part of transfer itself; therefore, assessee's claim for deduction of payment to ESOP Fund was to be allowed as while computing capital gain arising from slump sale of trading business and (ii) assessee had not acquired any tangible/intangible asset, which had any lasting and enduring benefit to the assessee's business and the payments were made for using the trademark and to obtain expertise in the field of commerce, finance and manufacturing, etc., which were needed for smooth running of the business and the expenses were paid only for one year, therefore, the expenses were revenue in nature, the Supreme Court dismissed the SLP as withdrawn due to low tax effect, however, leaving the questions of law open.
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Appeal (Supreme Court) - Special leave petition -capital or revenue expenditure - Expenses towards brand licencing agreement and trademark for use of expertise in the field of commerce, finance, etc. - Capital gains--Computation of
Department preferred SLP to appeal against the judgment of Delhi High Court in Pr. CIT v. Nitrex Chemicals India Ltd. (2016) 43 Taxman 371 (Del-HC) : 2016 TaxPub(DT) 4900 (Dedl-HC), whereby the High Court held that i since transferee had disclaimed any responsibility to honour ESOP conditions funding of Fund became integral part of transfer itself; therefore, assessee's claim for deduction of payment to ESOP Fund was to be allowed as while computing capital gain arising from slump sale of trading business and (ii) assessee had not acquired any tangible/intangible asset, which had any lasting and enduring benefit to the assessee's business and the payments were made for using the trademark and to obtain expertise in the field of commerce, finance and manufacturing, etc., which were needed for smooth running of the business and the expenses were paid only for one year, therefore, the expenses were revenue in nature.Held: Counsel for the petitioner, on instructions issued by the Department of Revenue, Ministry of Finance vide F.No. 390/Misc/116/2017-JC, dated 22-8-2019, sought permission to withdraw this special leave petition along with pending applications therein due to low tax effect. Permission was granted, subject to just exceptions. The special leave petition and pending applications were dismissed as withdrawn, leaving question(s) of law open.
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