JUDGMENT Dipak Misra, J. 1. This appeal preferred under Section 260A of the Income-tax Act, 1961 was admitted on the following questions of law: 1. Whether in the facts and circumstances of the case, the Tribunal was justified in upholding the disallowance of payment of commission to directors of assessee-company, amounting to Rs. 9 lakhs ? 2. Whether in the facts and circumstances of the case, the Tribunal was justified in deleting the addition of Rs. 2,95,390 made by the Assessing Officer on account of royalty payment for the use of trade mark ? 3. Whether in the facts and circumstances of the case, the Tribunal, was justified in allowing deduction under Sections 80HH and 80-I of the Act ? 2. Mr. Lal fairly submitted that question No. 1 has not been correctly framed and it should be reframed. Mr. H. S. Shrivastava, learned senior counsel, being assisted by Mr. S. Jain, also stated that there has been some error in framing of question. The question which is required to be framed would read as under: Whether in the facts and circumstances of the case, the Tribunal was justified in deleting the payment of commission to the directors of the assessee-company amounting to Rs. 9 lakhs from the net of tax ? 3. We need not state the facts in detail. Suffice it to say that the respondent-assessee is a private limited company engaged in the business of bidi. For the assessment year 1992-93, the assessee had made payment of Rs. 12,73,523 by way of commission to the directors calculated at 10 per cent. of the net profit and the Assessing Officer held only Rs. 3,73,522 could be allowed and, accordingly, disallowed Rs. 9 lakhs. The Assessing Officer treated Rs. 2,95,390 paid by the assessee towards use of trade mark as royalty amount and, accordingly, treated the same as capital expenditure. The Assessing Officer disallowed the deduction under Sections 80HH and 80-1 of the Act treating the unit as old unit and not a new one. 4. Being dissatisfied with the aforesaid order, the respondent-assessee preferred an appeal before the Commissioner of Income-tax who concurred with the order of the Assessing Officer. 5. The Assessing Officer disallowed the deduction under Sections 80HH and 80-1 of the Act treating the unit as old unit and not a new one. 4. Being dissatisfied with the aforesaid order, the respondent-assessee preferred an appeal before the Commissioner of Income-tax who concurred with the order of the Assessing Officer. 5. Being aggrieved by the aforesaid order, the assessee preferred an appeal before the Income-tax Appellate Tribunal, Jabalpur Bench, Jabalpur (in short "the Tribunal") which dislodged the finding of the Assessing Officer and allowed the appeal of the assessee. 6. We have heard Mr. S. Lal learned Counsel for the Revenue and Mr. H. S. Shrivastava, learned senior counsel along with Mr. Sandesh Jain, learned Counsel for the respondent-assessee. 7. At the very outset, it is worthwhile to indicate that these three issues at different stages had travelled to this Court in CIT v. Khemchand Motilal Jain Co. [1997] 228 ITR 338, wherein it has been held as under (page 341): On the basis of these admitted facts, the finding given by the Assessing Officer was found to be not sustainable. These admitted facts which emerge from the order of the appellate authority, make it clear that it was not a purchase of the wholesale firm but only purchase of certain things and started functioning as a new company because sales tax number, central excise number and labour licence under the Bidi and Cigar Act were taken anew. The movables like trade marks were not given to the company. All the immovable properties were not taken over. Therefore, these facts, which have been recorded by the appellate authority and affirmed by the Tribunal speak eloquently that there was no complete succession. Therefore, in these circumstances, on the basis of the admitted facts, as they emerged, it transpires that it was not a reconstruction of a business of the erstwhile firm but a new company emerged though it has taken over certain movable and immovable property and stocks, which were lying there and out of that a new company has emerged and it cannot be said to be reconstruction of the same firm though some of the partners may be common. All these concurrent findings of fact make it clear that it was not a reconstruction of the old concern. Hence, we answer the first question in favour of the assessee and against the Revenue. All these concurrent findings of fact make it clear that it was not a reconstruction of the old concern. Hence, we answer the first question in favour of the assessee and against the Revenue. Similarly, the question of disallowance under Section 40(c) is concerned, the Tribunal has also affirmed the findings of the appellate authority. The appellate authority took the view that salary as defined in Section 17 does not include commission. It is pointed out that the commission which was paid was independent of the salary. It is alleged that the commission paid to Shri Motilal Jain, Shri Jeewanlal Jain, Shri Prakash Chand Jain and Shri Azad Kumar Jain was in pursuance of the resolution passed by the board on January 1, 1982, and it has nothing to do with the salary which was paid to some of the partners. This commission was paid to them for their financial involvement and they having given guarantee for the loans taken by the company. It was contended that there was no proximity between these two. The appellate authority held that this was not in lieu of salary paid to them for the full time services rendered by them. Therefore, it was not considered to be salary. It was also found that it was not in excess warranting any part for disallowance under section 40(c). The appellate authority divided it in two parts, i.e., salary and commission, and treated this as commission only and not part of salary and not found to be excessive. Therefore, this disallowance was also negatived and this was affirmed by the Tribunal. We have considered the factual aspects and in view of the concurrent finding of fact given by both the authorities below, i.e., the appellate authority and the Tribunal, we are of the opinion that there is no reason to take a different view from the view taken by both the authorities below. Hence, we answer both the aforesaid questions in favour of the assessee and against the Revenue. Accordingly, we answer both the questions in favour of the assessee and against the Revenue. 8. In CIT v. Khemchand Motilal Jain [1998] 96 Taxman 207 (MP) it has been held as follows (page 208): 3. Hence, we answer both the aforesaid questions in favour of the assessee and against the Revenue. Accordingly, we answer both the questions in favour of the assessee and against the Revenue. 8. In CIT v. Khemchand Motilal Jain [1998] 96 Taxman 207 (MP) it has been held as follows (page 208): 3. The Assessing Officer, while completing the assessment observed that since the assessee had used the same trade mark for continuing the business, it has received good reputation in the market and the amount paid towards its use cannot be treated as revenue expenditure, but it is a capital expenditure. 4. On appeal the Commissioner (Appeals) confirmed the view that by the Assessing Officer. Thereafter the Tribunal allowed the appeal set aside the order of the Commissioner (Appeals) and relying on the decision given in the case of CIT v. M. B. Umbrella Industries [1984] 145 ITR 292 (MP), held that the price paid amounts to revenue expenditure and liable to be deducted in computing the total income of the assessee. Against this order, the Revenue approached the Tribunal for stating the case, but the application was rejected on the ground that this case is covered by the decision of this Court in M. B. Umbrella Industries' case [1984] 145 ITR 292 (MP). Hence, the Revenue approached this Court under Section 256(2) for calling statement of the case. 5. We have heard the learned Counsel for the parties and perused the record. The above decision squarely covers the present case. It has been held by this Court that under an agreement with another firm, the assessee was allowed to use the trade mark for 5 years on payment of compensation and the agreement amounted to licence to use the trade mark and the payment was in the nature of royalty The trademark used by the assessee was not the price paid for acquisition of capital asset or goodwill or trade mark and the amount paid for the exploitation of trade mark was an allowable revenue expenditure. This view has been further reaffirmed by another decision of this Court in the case of Mohanlal Hargovinddas v. CIT [1991] 188 ITR 556. This view has been further reaffirmed by another decision of this Court in the case of Mohanlal Hargovinddas v. CIT [1991] 188 ITR 556. In this case, the Division Bench relying on the M. B. Umbrella Industries' case [1984] 145 ITR 292 (MP), has extended the principle to cases where there is an agreement without circumscribed by any time-limit In this case, the agreement was for an indefinite period without any limitation of time and it had no relation with the capital value of asset. Therefore, the Division Bench, in case of Mohanlal Hargovinddas [1991] 188 ITR 556 held that the amount, paid in lieu of share of goodwill or trade mark, was revenue expenditure. Since this has been the consistent view of this Court, the Tribunal rejected the application of the Revenue. There is no reason to take a different view. 9. Against the aforesaid order, the Revenue had approached the apex court. Their Lordships dismissed the special leave petition as regards the allowance relating to determination under Sections 80HH and 80-I. As regards the factum of commission the Revenue had not challenged the same as stated by the learned Counsel for the parties. As far as the royalty is concerned, the controversy has been dealt with by the Tribunal in paragraphs 9 and 10 of the order and following the earlier orders, payment of royalty for use of the trade mark was allowed. Be it noted, the agreement for trade mark was executed in the year 1982 and renewed for another seven years from January 1, 1987 to December 31, 1993 and the Revenue had challenged the allowance of the use of trade mark being an expenditure before this Court which has been reported in CIT v. Khemchand Motilal Jain [1998] 96 Taxman 207 (MP) wherein this Court following the earlier decision of this Court in CIT v. M.B. Umbrella Industries [1984] 145 ITR 292 allowed the claim. The Revenue preferred a special leave petition before the apex court which eventually converted to Civil Appeal No. 4023 of 1998. During the course of hearing of the said appeal, the assessee had stated that he has no objection to the question being referred back to the High Court for decision because in another matter, identical question had already, been referred. During the course of hearing of the said appeal, the assessee had stated that he has no objection to the question being referred back to the High Court for decision because in another matter, identical question had already, been referred. The apex court passed the following order: It shall, of course, be open to the assessee to urge that the question stands concluded in his favour by reason of judgment of this Court and or High Court. 10. Thereafter, the matter has come up before this Court pertaining to allowance of royalty for use of trade mark in the same type of business. In CIT v. J. P. Tobacco Products in MAIT No. 43 of 2005 decided on March 29, 2006, the royalty payment was allowed as business expenditure. 11. In this context, we may refer with profit to the decision rendered in CIT v. British India Corporation Ltd. [1987] 165 ITR 51 wherein the apex court allowed the payment made under an agreement for user of trade mark and for obtaining the know-how and specialised training process for a period of seven years as a revenue expenditure. 12. In Alembic Chemical Works Co. Ltd. v. CIT : [1989] 177 ITR 377, the apex court allowed the payment for use of know-how. 13. In Empire Jute Co. Ltd. v. CIT [1980] 124 ITR 1, the apex court quoted with approval the observation from the decision in Hallstrom's Property Ltd. v. Federal Commissioner of Taxation 72 CLR 634 which is as follows (page 13): What is an outgoing of capital and what is an outgoing on account of revenue depends on what the expenditure is calculated to effect from a practical and business point of view rather than upon the juristic classification of the legal rights, if any, secured, employed or exhausted in the process." The question must be viewed in the larger context of business necessity or expendiency. If the outgoing expenditure is so related to the carrying on or the conduct of the business that it may be regarded as an integral part of the profit-earning process and not for acquisition of an asset or a right of a permanent character, the possession of which is a condition of the carrying on of the business the expenditure may be. regarded as revenue expenditure. See Bombay Steam Navigation Co. (1953) P. Ltd. v. CIT [1965] 56 ITR 52 (SC). regarded as revenue expenditure. See Bombay Steam Navigation Co. (1953) P. Ltd. v. CIT [1965] 56 ITR 52 (SC). The same test was formulated by Robert Addle and Sons' Collieries Ltd. v. IRC [1924] 8 TC 671, 676 (C Sess) in these words : 'Is it a part of the company's working expenses ?-Is it expenditure laid out as part of the process of profit earning or, on the other hand, is it a capital outlay/-is it expenditure necessary for the acquisition of property or of rights of a permanent character, the possession of which is a condition of carrying on its trade at all ?' 14. In this context, we may refer with profit to the decision rendered in CIT v. Ashoka Mills Ltd. [1996] 218 ITR 526 wherein the High Court of Gujarat has allowed payment of royalty for use of trade mark as revenue expenditure. 15. In view of the aforesaid, we are of the considered opinion that the Tribunal was justified in deleting the addition made by the Assessing Officer on account of royalty payment for use of trade mark. 16. Consequently, the appeal, being devoid of merit, stands dismissed. However, there shall be no order as to costs.