ACIT, Central Circle-25, V. Bhushan Kumar,

ITA 1179/DEL/2004

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 3801 (ITAT-DELHI)
• Duration Of Justice: 6 year(s) 3 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-06-2010
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 16-06-2010
• Assessment Year: 2000-2001
• Appeal Filed On: 12-03-2004
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: G S SAHOTA
• Keywords: Revenue expenditure; Capital expenditure

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH `E: NEW DELHI BEFORE SHRI C.L.SETHI, JM & SHRI B.C. MEENA, AM I.T. A. NO.1179/DEL OF 2004 ASSESSMENT YEAR: 2000-01 ACIT, CENTRAL CIRCLE-25, VS SHRI BHUSHAN KUMAR, NEW DELHI. H-10, MASJID MOTH, G.K-II, NEW DELHI. APPELLANT RESPONDENT APPELLANT BY: SHRI G.S. SAHOTA, SR. DR RESPONDENT BY: NONE ORDER PER C.L. SETHI, JM: IN THIS APPEAL FILED BY THE REVENUE AGAINST THE ORD ER DATED 24.12.2003 IN THE MATTER OF AN ASSESSMENT MADE BY THE AO U/S 1 43(3) OF THE INCOME-TAX ACT, 1961 (THE ACT) FOR THE ASSESSMENT YEAR 2000-01 . 2. THE ONLY GROUND RAISED BY THE REVENUE IS AS UNDE R: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.6,14,500/- AND RS.8,54,443/- MADE ON ACCOUNT OF ROYALTY AND RECORDING EXPENDITURE TREATING THE SAME AS REVENUE EXPENDITURE. 3. THE CLAIM OF THE ASSESSEE ON ACCOUNT OF ROYALTY PAYMENT OF RS.6,14,500/- AND REGARDING EXPENSES OF RS.8,54,443 /- ON MAKING VARIOUS 2 PROJECTS HAS BEEN REJECTED BY THE AO BY TREATING TH E EXPENDITURE TO BE OF CAPITAL IN NATURE. THE AO HAS DECIDED THE ISSUE BY OBSERVING AS UNDER: THE ASSESSEE HAS CLAIMED EXPENDITURE ON ACCOUNT OF ROYALTY PAYMENT OF RS.6,14,500/- FOR PURCHASE OF MUSIC RIGHTS OF DIFFERENT PROJECTS. SIMILARLY, THE ASSESSEE FIRM, M/S SUPER MUSIC INTERNATIONAL HAS INCURRED RECORDING EXPENSES RS.8,54,443/- ON MAKING VARIOUS PROJECTS. ROYALTY AND RECORDING EXPENDITURE HAVE BEEN HELD TO BE THE CAPITAL EXPENDITURE IN THE CASE OF OTHER GROUP CONCERN. THE BENEFIT OF ROYALTY AND RECORDING EXPENSES ARE EXPLOITED BY THE ASSESSEE FOR A NUMBER OF YEARS. HENCE, ROYALTY EXPENDITURE OF RS.6,74,500/- AND RECORDING EXPENSES OF RS.8,54,443/- ARE HEREBY DISALLOWED. 4. ON AN APPEAL, CIT(A) ALLOWED THE ASSESSEES CLAI M IN THE LIGHT OF ORDER OF THE CIT(A) IN THE CASE OF M/S SUPER CASSET TES INDUSTRIES LTD. FOR VARIOUS ASSESSMENT YEARS, INCLUDING APPEAL NO.20/03 -04 DATED 14.5.2003 FILED BY M/S SUPER CASSETTES INDUSTRIES LTD. BEFORE THE CIT(A), WHERE A VIEW WAS TAKEN THAT THE EXPENDITURE ARE TO BE CONSI DERED TO BE OF REVENUE IN NATURE. 5. HENCE, THE DEPARTMENT IS IN APPEAL BEFORE US. 6. WE HAVE HEARD THE LEARNED DR. ADJOURNMENT APPLI CATION FILED BY THE ASSESSEE HAS BEEN REJECTED, CONSIDERING THE FACT TH AT THE ISSUE CAN BE DECIDED 3 ON THE BASIS OF MATERIAL AVAILABLE ON RECORD, IN TH E ABSENCE OF THE ASSESSEE, AS THE MATTER IS VERY OLD BEING FILED IN THE YEAR 2 004. 7. WE HAVE GONE THROUGH THE ORDER DATED 24.7.2009 O F ITAT, DELHI BENCH B NEW DELHI IN THE CASE OF DCIT VS M/S SUPE R CASSETTES INDUSTRIES LTD. (ITA NO.814/DEL/2008) PERTAINING TO THE ASSTT. YEAR 2004-05, WHERE THE PAYMENT OF ROYALTY AND RECORDING EXPENSES HAS B EEN TREATED TO BE REVENUE IN NATURE BY FOLLOWING THE EARLIER DECISION OF THE TRIBUNAL PERTAINING TO THE ASSTT. YEAR 1995-96 IN ITA NO.07/DEL/2000. MOREOVER, THE AO HAS NOT BROUGHT ANY MATERIAL ON RECORD TO SHOW AND ESTA BLISH THAT BY INCURRING THESE EXPENSES, THE ASSESSEE HAS ACQUIRED ANY ASSET OF CAPITAL IN NATURE OR HAS DERIVED THE BENEFIT OF ENDURING NATURE IN SUCH A MA NNER SO AS TO TREAT THE EXPENSES TO BE OF CAPITAL IN NATURE. 8. IN THE LIGHT OF THE DISCUSSIONS MADE ABOVE, WE, THEREFORE, UPHELD THE ORDER OF CIT(A), AND REJECT THE GROUND RAISED BY TH E REVENUE. 9. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. 10. THIS DECISION WAS PRONOUNCED IN THE OPEN COURT ON 16 TH JUNE, 2010. (B.C. MEENA) (C.L. SETHI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: .. JUNE, 2010 VIJAY 4 COPY TO: 1. APPELLANT. 2. RESPONDENT. 3. CIT 4. CIT(A)-I, NEW DELHI 5. DR ASSISTANT REGISTRAR