ACIT, New Delhi V. M/s. Henkel Terson India Ltd., New Delhi

ITA 118/DEL/2012

• Counselvise Citation: 11820114 RSA 2012
• Duration Of Justice: 2 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-03-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 21-03-2012
• Assessment Year: 2008-2009
• Appeal Filed On: 09-01-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V K SAKSENA
• Assessee Lawyers: ANIL CHADHA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL DELHI DELHI DELHI DELHI BENCH BENCH BENCH BENCH C CC C : NEW DELHI : NEW DELHI : NEW DELHI : NEW DELHI BEFORE SHRI G. BEFORE SHRI G. BEFORE SHRI G. BEFORE SHRI G.D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, VICE PRESIDENT AND VICE PRESIDENT AND VICE PRESIDENT AND VICE PRESIDENT AND SHRI SHRI SHRI SHRI A.D.JAIN A.D.JAIN A.D.JAIN A.D.JAIN, JUDICIAL MEMBER , JUDICIAL MEMBER , JUDICIAL MEMBER , JUDICIAL MEMBER ITA NO. ITA NO. ITA NO. ITA NO.118 118 118 118/DEL/201 /DEL/201 /DEL/201 /DEL/2012 22 2 ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR : : : : 200 200 200 2008 88 8- -- -09 0909 09 ASSISTANT COMMISSIONER OF ASSISTANT COMMISSIONER OF ASSISTANT COMMISSIONER OF ASSISTANT COMMISSIONER OF INCOME TAX, INCOME TAX, INCOME TAX, INCOME TAX, CIRCLE CIRCLE CIRCLE CIRCLE- -- -12(1), 12(1), 12(1), 12(1), NEW DELHI. NEW DELHI. NEW DELHI. NEW DELHI. VS. VS. VS. VS. M/S HENKEL TEROSON INDIA LTD., M/S HENKEL TEROSON INDIA LTD., M/S HENKEL TEROSON INDIA LTD., M/S HENKEL TEROSON INDIA LTD., 1, SRI AUROBINDO MARG, 1, SRI AUROBINDO MARG, 1, SRI AUROBINDO MARG, 1, SRI AUROBINDO MARG, NEW DELHI NEW DELHI NEW DELHI NEW DELHI 110 016. 110 016. 110 016. 110 016. PAN : AAACH5216Q. PAN : AAACH5216Q. PAN : AAACH5216Q. PAN : AAACH5216Q. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI V.K.SAKSENA, CIT-DR. RESPONDENT BY : SHRI ANIL CHADHA, CA. ORDER ORDER ORDER ORDER PER G. PER G. PER G. PER G.D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, VP VPVP VP : : : : THIS APPEAL BY THE REVENUE IS FILED AGAINST THE OR DER OF LEARNED CIT(A)-XV, NEW DELHI DATED 24 TH OCTOBER, 2010 FOR THE AY 2008-09. 2. THE ONLY GROUND RAISED BY THE REVENUE IN THIS AP PEAL READS AS UNDER:- WHETHER LD.CIT(A) WAS CORRECT ON FACTS AND CIRCUMS TANCES OF THE CASE AND IN LAW IN DELETING THE DISALLOWANCE OF RS.70,09,183/- ON ACCOUNT OF ROYALTY. 3. AT THE TIME OF HEARING BEFORE US, IT WAS POINTED OUT BY THE LEARNED COUNSEL FOR THE ASSESSEE THAT THE ISSUE INV OLVED IN THE PRESENT APPEAL IS SETTLED IN FAVOUR OF THE ASSESSEE BY THE ORDER OF THE ITAT PASSED IN ITA NO.4844/DEL/2009 DATED 28 TH SEPTEMBER, 2010 IN ITA-118/DEL/2012 2 ASSESSEES OWN CASE FOR AY 2004-05. HE HAS ALSO PL ACED ON RECORD A COPY OF THE SAID ORDER OF THE TRIBUNAL. 4. THE LEARNED DR SUPPORTED THE ORDER OF THE ASSESS ING OFFICER. 5. WE HAVE HEARD THE CONTENTIONS OF BOTH THE SIDES AND PERUSED THE MATERIAL PLACED BEFORE US. WE ARE IN AGREEMENT WITH THE SUBMISSION OF THE LEARNED COUNSEL FOR THE ASSESSEE THAT THE ISSUE RELATING TO DISALLOWANCE OF ROYALTY AMOUNT IS COVER ED IN FAVOUR OF THE ASSESSEE BY THE ORDER OF THE COORDINATE BENCH OF TH E TRIBUNAL DATED 28 TH SEPTEMBER, 2010 (SUPRA) RENDERED IN ASSESSEES OWN CASE. IN THE SAID ORDER OF THE TRIBUNAL, DELHI C BENCH HAS FOL LOWED THE DECISION OF HONBLE JURISDICTIONAL HIGH COURT DATED 3 RD SEPTEMBER, 2009 IN ITA NO.837 OF 2009 IN THE CASE OF CIT VS. SARDA MOTOR I NDUSTRIAL LTD. WE REPRODUCE THE RELEVANT EXTRACT OF THE AFORESAID TRI BUNAL ORDER AS FOLLOWS:- 7.2 FROM THE ABOVE, IT IS VERY CLEAR THAT ASSESSEE HAS NOT OBTAINED ANY BENEFIT OF ENDURING NATURE. THE ROYAL TY IS PAYABLE ON THE BASIS OF VOLUME OF SALES YEAR TO YEA R. IN THE EVENT OF TERMINATION OF AGREEMENT HAS TO DISCON TINUE USES OF MATERIAL PROVIDED RETURN EVERYTHING IN THIS RESPECT. HENCE IT CANNOT BE SAID THAT ANY BENEFIT OF ENDURIN G NATURE ACCRUED TO THE ASSESSEE. FURTHERING EXAMINING THE PRESENT CASE ON THE TOUCHSTONE OF JURISDICTIONAL HIGH COURT CITED ABOVE, WE FIND THAT THE SAME IS SQUARELY APPLICABLE TO THE FACTS OF THE CASE. THE LD. DEPARTMENTAL REPRESENTA TIVE DID NOT FULLY DISPUTE THIS FINDING, HE ONLY CONTENDED T HAT THE AGREEMENT ALSO PROVIDED TRAINING TO THE ASSESSEES EMPLOYEES, WHICH CANNOT BE RETURNED IN ANY CASE. W E DO NOT FIND ANY COGENCY IN THIS ASPECT OF THIS AGREEME NT AS TRAINING EXPENSE OF EMPLOYEE CANNOT BE TREATED AS C APITAL ITA-118/DEL/2012 3 EXPENDITURE. THE CASE LAW RELIED UPON BY THE REVEN UE ARE NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE. H ENCE, RESPECTFULLY FOLLOWING THE PRECEDENT FROM THE DECIS ION OF THE HONBLE JURISDICTIONAL HIGH COURT CITED ABOVE, WE SET ASIDE THE ORDER OF THE AUTHORITIES BELOW ON THIS IS SUE AND DECIDE THE ISSUE IN FAVOUR OF THE ASSESSEE. 6. IN VIEW OF THE ABOVE POSITION, WE UPHOLD THE IMP UGNED ORDER OF LEARNED CIT(A) AND DISMISS THIS APPEAL FILED BY THE REVENUE. 7. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. DECISION PRONOUNCED IN THE OPEN COURT ON CONCLUSION OF HEARING ON 21 ST MARCH, 2012. SD/- SD/- ( (( (A.D.JAIN A.D.JAIN A.D.JAIN A.D.JAIN) )) ) (G.D.AGRAWAL) (G.D.AGRAWAL) (G.D.AGRAWAL) (G.D.AGRAWAL) JUDICIAL JUDICIAL JUDICIAL JUDICIAL MEMBER MEMBER MEMBER MEMBER VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT DATED : 21.03.2012 VK. COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT ASSISTANT REGISTRAR