DCIT, New Delhi V. Frank Brotehrs & Co. Publication Ltd., Delhi

ITA 1108/DEL/2013

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 0007 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 2 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-05-2015
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 26-03-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 26-02-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL

Judgement Text

THE INCOME TAX APPELLATE TRIBUNAL IN (DELHI BENCH B NEW DELHI) BEFORE SHRI S.V. MEHROTRA, ACCOUNTANT MEMBER AND SHRI C.M.GARG, JUDICIAL MEMBER ITA NO. 1108/DEL/2013 (ASSESSMENT YEAR: 2009-10) DCIT VS. FRANK BROT HERS & CO. PUBLICATION LTD., 4675-A/21, ANSARI ROAD, DARY AGANJ NEW DELHI DELHI AAAC F0781 E (APPELLANT) (RESPONDENT) APPELLANT BY : SMT. PARWINDER KAUR, SR. DR RESPONDENT : SHRI S.K. AGGARWAL, CA DATE OF HEARING : 26.03.2015 DATE OF PRONOUNCEMENT : 06.05.2015 ORDER PER C.M.GARG, JUDICIAL MEMBER : THIS APPEAL BY THE REVENUE HAS BEEN DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) XIII DATED 31. 12.2012 IN APPEAL NO. 311/2011-12 FOR A.Y. 2009-10. ITA NO. 1108/ DEL/2013 2 2. THE SOLE GROUND RAISED BY THE REVENUE READS AS UNDER :- ON THE FACTS AND CIRCUMSTANCE OF THE C ASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION O F RS. 12,10,352/- MADE ON ACCOUNT OF ROYALTY PAID. 3. WE HAVE HEARD ARGUMENT OF BOTH THE SIDES AND CAREFULLY PERUSED THE RELEVANT MATERIAL PLACED ON THE RECORDS . AT THE VERY OUTSET, THE LD. DEPARTMENTAL REPRESENTATIVE DRAWN O UR ATTENTION TOWARDS ASSESSEES PAPER BOOK PAGE 246 TO 250 AND S UBMITTED THAT THE ITAT, DELHI D BENCH VIDE ORDER DATED 4.7.2012 IN ITA NO. 4663 (DEL.) 2010 FOR A.Y. 2007-08 IN ASSESSEES OWN CASE I.E. DCIT VS. MRS. FRANK BROTHERS AND CO. HAS RESTORED THE SIMILA R ISSUE TO THE FILE OF AO TO CONSIDER THE ISSUE AND AFRESH, THEREFORE, IN THE SIMILAR MANNER WITH THE SIMILAR SET OF FACTS AND CIRCUMSTAN CES THE SOLE ISSUE INVOLVED IN THE PRESENT CASE MAY KINDLY BE RESTORED TO THE FILE OF AO FOR PROPER VERIFICATION EXAMINATION AND AFRESH ADJU DICATION. THE LD. ASSESSEES REPRESENTATIVE SUPPORTED THE IMPUGNED OR DER AND SUBMITTED THAT THE IMPUGNED ADDITION MADE BY THE AO ON ACCOUNT OF ROYALTY PAID WAS RIGHTLY DELETED BY THE CIT(A) AND HENCE IMPUGNED ORDER MAY KINDLY BE UPHELD. HOWEVER, THE LD. COUNSE L OF THE ASSESSEE FAIRLY ACCEPTED THAT THE SIMILAR ISSUE IN A.Y. 2007-08 IN ITA NO. 1108/ DEL/2013 3 ASSESSEES OWN CASE HAS BEEN RESTORED TO FILE OF AO BY THE ORDER OF THE TRIBUNAL DATED 4.7.2012. 4. ON CAREFUL CONSIDERATION OF ABOVE SUBM ISSIONS FROM THE ORDER OF THE TRIBUNAL (SUPRA) AT PAGE 4, 5 AND 6 PA RAGRAPH NO. 6, 6.1 AND 6.2. THE ISSUE OF ROYALTY HAS BEEN RESTORED TO THE FILE OF AO WITH FOLLOWING OBSERVATIONS AND CONCLUSION -: WE HAVE HEARD THE LD. DEPARTMENTAL REPRESENTAT IVE. NONE APPEARED ON BEHALF OF THE ASSESSEE. UPON CAREF UL CONSIDERATION, WE FIND THAT MATTER CAN BE DISPOSED OF BY HEARING THE LD. DEPARTMENTAL REPRESENTATIVE AND PER USING THE RECORDS. WE FIND THAT ASSESSING OFFICER HAS MAD E THE IMPUGNED ADDITION BY COMPARING THE ROYALTY PAID VIS --VIS SALES OF A PARTICULAR YEAR. LD. COMMISSIONER OF INC OME TAX (A) HAS NOTED THAT ASSESSEE HAS SUBMITTED VARIOUS C OPY OF AGREEMENTS WITH AUTHORS AS WELL AS DETAILED CHART O F ROYALTY CALCULATION. CONSIDERING THESE AGREEMENTS AND DETAI LED CHART OF ROYALTY, LD. COMMISSIONER OF INCOME TAX (A ) HAS HELD THAT THE ENTIRE ROYALTY PAYMENT IS ON REVENUE ACCOUNT AND THE DISALLOWANCE MADE BY THE ASSESSING OFFICER FOR RS. 27,21,133/- IS DELETED. IN THIS REGARD, IT IS THE CONTENTION OF THE LD. DEP ARTMENTAL REPRESENTATIVE THAT THERE IS NO MENTION IN THE APPE LLATE ORDER AS TO WHETHER THE DETAILS OF AGREEMENT AND RO YALTY CHARGES, SUBMITTED BEFORE THE LD. COMMISSIONER OF I NCOME TAX (A), WERE ALSO GIVEN TO THE ASSESSING OFFICER. HE FURTHER CLAIMED THAT THERE IS NO MENTION IN THE APP ELLATE ORDER THAT THE REMAND REPORT IN THIS REGARD WAS SOU GHT. HENCE, LD. DEPARTMENTAL REPRESENTATIVE CONTENDED TH AT MATTER MAY BE REMITTED TO THE FILE OF THE ASSESSING OFFICER TO CONSIDER THE ISSUE AFRESH. 6.2 WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS AND PERUSED THE RECORDS. IN OUR CONSIDERED OPINION, INT EREST OF JUSTICE WILL BE SERVED, IF THE MATTER IS REMITTED T O THE FILE OF THE ASSESSING OFFICER TO CONSIDER THE ISSUE AFRESH. WE HOLD ITA NO. 1108/ DEL/2013 4 AND DIRECT ACCORDINGLY, NEEDLESS TO ADD THAT THE AS SESSEE SHOULD BE GRANTED ADEQUATE OPPORTUNITY OF BEING HEA RD. 5. IN VIEW OF ABOVE, IT IS NOT IN DISPUTE THAT T HE SIMILAR ADDITION ON ACCOUNT OF ROYALTY WAS MADE BY THE AO AND DELETED B Y THE CIT(A) IN A. Y. 2007-08. IN THE PRESENT CASE, WE ARE ALSO IN AGR EEMENT WITH THE CONTENTION OF THE LD. DR THAT THERE IS NO MENTION I N THE APPELLATE ORDER AS TO WHETHER THE DETAILS OF AGREEMENT AND ROYALTY CHARGES WERE SUBMITTED BEFORE THE AUTHORITIES BELOW AND THERE IS ALSO NO MENTION IN THE FIRST APPELLATE ORDER THAT ANY REMAND REPORT WA S SOUGHT BY THE CIT(A) FROM THE AO IN THIS REGARD ON THE ISSUE OF R OYALTY. 6. THEREFORE, WE FIND JUST AND PROPER TO RESTOR E THIS ISSUE TO THE FILE OF AO FOR AFRESH ADJUDICATION IN THE SAME LINE AS WAS RESTORED FOR AY 2007-08 BY THE ORDER OF THE TRIBUNAL DATED 4.7.2012 (SUPRA). ACCORDINGLY, WE RESTORE THE ISSUE TO THE FILE OF AO WITH A DIRECTION THAT HE SHALL EXAMINE AND VERIFY THE CLAIM OF ROYALTY DE NOVO AFTER CONSIDERING RELEVANT PROVISIONS OF LAW AS WELL AS A DETAILS, EVIDENCE AND DOCUMENTS OF THE ASSESSEE INCLUDING RELEVANT AGREEM ENT AND DETAILS OF ROYALTY CHARGES AND AFFORDING DUE OPPORTUNITY OF HE ARING FOR THE ASSESSEE AND BEING INFLUENCED BY THE EARLIER ASSESS MENT AND IMPUGNED ORDER. HENCE, SOLE GROUND OF THE REVENUE I S DEEM TO BE ALLOWED FOR STATISTICAL PURPOSES. ITA NO. 1108/ DEL/2013 5 7. IN THE RESULT, APPEAL OF THE REVENUE IS DEEM TO BE ALLOWED FOR STATISTICAL PURPOSES IN THE MANNER AS INDICATED ABO VE. ORDER PRONOUNCED IN OPEN COURT ON 6 TH MAY, 2015. SD/- SD/- (S.V.MEHROTRA) (C.M.GARG) ACCOUNTANT MEMBER JUDICI AL MEMBER DATED 6 TH MAY, 2015 B.RUKHAIYAR COPY FORWARDED TO 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. CIT (ITAT), NEW DELHI. AR, ITAT N. DELHI ITA NO. 1108/ DEL/2013 6 SL. NO. DESCRIPTION DATE 1. DATE OF DICTATION BY THE AUTHOR 1.05.2015 2. DRAFT PLACED BEFORE THE DICTATING MEMBER 5.05.2015 3. DRAFT PLACED BEFORE THE SECOND MEMBER 4. DRAFT APPROVED BY THE SECOND MEMBER 5. DATE OF APPROVED ORDER COMES TO THE SR. PS 6. DATE OF PRONOUNCEMENT OF ORDER 7. DATE OF FILE SENT TO THE BENCH CLERK 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK 9. DATE OF DISPATCH OF ORDER ITA NO. 1108/ DEL/2013 7