METRO MOTORS AUTO DIVISON, MUMBAI V. ITO 16(3)(4), MUMBAI

ITA 1265/MUM/2013

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 6532 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 3 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-05-2014
• Appeal Filed By: Assessee
• Bench Allotted: B
• Next Hearing Date: 07-05-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 14-02-2013
• Court: TRIBUNAL
• Keywords: Revenue expenditure; Capital expenditure

Judgement Text

VK;DJ VIHYH; VF/KDJ.K ** CH U;K;IHB EQACBZ ESAA IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI JH TH + ,L + IUUW] YS[KK LNL; ,OA JH VFER KQDYK] U;KF;D LNL; DS LE{KA BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER AND SHRI AMIT SHUKLA, JUDICIAL MEMBER VK;DJ VIHY LA[;K@ ITA NO 12 65 /MUM/201 3 ( FU/KKZJ.K OKZ / ASSESSMENT YEAR: - 2009 - 10 ) METRO MOTORS AUTO DIVISION C/O GMMCO LIMITED MAKER BHAWAN NO. 2 02 ND FLOOR, 18 NEW MARINE LINES, MUMBAI 400 020. VS.` INCOME TAX OFFICER 16(3)(4), ROOM NO. 201, 02 ND FLOOR, MATRU MANDIR, TARDEO ROAD, MUMBAI 400007. LFKK;H YS[KK LA[;K@TH VKB VKJ LA[;K@ PAN/GIR NO. AAB FM7783R APPELLANT RESPONDENT ORDER PER G.S. PANNU, AM THE CAPTIONED APPEAL PREFERRED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) (HEREINAFTER REFERRED TO AS THE CIT(A) DATED 22.11.2012 WHICH IN TURN HAS ARISEN FROM AN ORDER PASSED BY THE ASSESSING OFFICER U/S 143 (3) OF THE INCOME TAX ACT, 1961( HEREINAFTER REFERRED TO AS THE ACT) DATED 19.12.2011 PERTAINING TO ASSESSMENT Y EAR 2009 - 10. FU/KZKFJFR FD VKSJ LS @ ASSESSEE BY MS. HEENA MEHTA JKTLO FD VKSJ LS @ REVENUE BY SHRI. S.J. SINGH LQUOKBZ FD RKJH[K @ DATE OF HEARING 07.05.2015 ?KKSK.KK FD RKJH[K@ DATE OF PRONOUNCEMENT 15 .5.2015 METRO MOTORS AUTO DIVISION 2 | P A G E 2. THE ONLY ISSUE RAISED BY THE ASSESSEE IN THIS APPEAL IS WITH REGARD TO A SUM OF RS. 10,00,000/ - PAID BY THE ASSESSEE AS NON COM PETE FEE TO ONE M/S BOMBAY METRO MOTORS LTD. THE ASSESSEE HAD CLAIMED THE AFORESAID SUM AS REVENUE EXPENDITURE, WHEREAS, THE ASSESSING OFFICER DISALLOWED THE SAME ON THE GROUND THAT IT WAS A CAPITAL EXPENDITURE. 3. WE FIND THAT BEFORE THE CIT(A), ASSESSEE CONTENDED THAT SIMILAR DISALLOWANCE IN THE PAST YEARS OF 2000 - 01 TO 2005 - 06 WAS ADJUDICATED IN ASSESSEES FAVOUR BY THE TRIBUNAL AND THAT THE HONBLE BOMBAY HIGH COURT HAD ALSO UPHELD SUCH DECISION OF TRIBUNAL FOR ASSESSMENT YEAR 2002 - 03 VIDE ORDER DATED 28.08.2014. THE CIT(A) DID NOT DISPUTE THE AFORESAID FACTUAL MATRIX BUT ACCORDING TO HIM THE DEDUCTION FOR THE IMPUGNED EXPENDITURE WAS NOT ALLOWABLE AS A REVENUE EXPENDITURE BECAUSE FOR THE YEAR UNDER CONSIDERATION, THERE WAS NO AGREEMENT BETWEEN THE P ARTIES CONCERNED. FOR THE SAID REASONING, THE CIT(A) AFFIRMED THE DISALLOWANCE MADE BY THE ASSESSING OFFICER AND ACCORDINGLY THE ASSESSEE IS IN FURTHER APPEAL BEFORE US. 4. BEFORE US, THE LD. REPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT THE AFORESAID DISPUTE , UNDER IDENTICAL CIRCUMSTANCES , CAME UP BEFORE THE TRIBUNAL FOR ASSESSMENT YEAR 2008 - 09 AND VIDE ITA NO. 919/MUM/2012, DATED 4.12.2014, THE CLAIM OF THE ASSESSEE HAS BEEN ALLOWED. A COPY OF THE SAID ORDER WAS ALSO PLACED ON RECORD. 5. IN THE ABOVE BACKGROUND , WE HAVE CONSIDERED THE RIVAL STAND. IN ASSESSMENT YEAR 2008 - 09 (SUPRA), TRIBU NAL NOTED THE OBJECTION OF THE R EVENUE THAT IN THE ABSENCE OF A WRITTEN CONTRACT, THE IMPUGNED SUM PAID TO M/S BOMBAY METRO MOTORS LTD AS NON - COMPETE FEE COULD NOT BE ALLOWED AS A DEDUCTION. THE TRIBUNAL HELD THAT MERE ABSENCE OF A WRITTEN CONTRACT WOULD NOT MAKE A DIFFERENCE ; AND , THAT THE EXISTENCE OF A N ORAL CONTRACT WOULD ALSO JUSTIFY ASSESSEES CLAIM FOR DEDUCITON . THE METRO MOTORS AUTO DIVISION 3 | P A G E TRIBUNAL FURTHER NOTED IN ITS O RDER THAT THE EXISTENCE OF A CONTRACT WHETHER WRITTEN OR ORAL , WAS A SUB JECT MATTER OF VERIFICATION AND REMANDED THE MATTER BACK TO THE FILE OF ASSESSING OFFICER TO ASCERTAIN THE ABOVE, AND THEREAFTER ADJUDICATE AFRESH KEEPING IN MIND THE JUDGMENT OF HONB LE BOMBAY HIGH COURT IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2002 - 03 (SUPRA). 6. NO ARGUMENT HAS BEEN SET UP BY THE LD. DR BEFORE US WHICH WOULD REQUIRE US TO DEVIATE FROM THE VIEW ALREADY EXPRESSED BY THE TRIBUNAL ON A SIMILAR ISSUE IN ASSESSEES OWN CASE FOR A.Y. 2008 - 09(SUPRA). ACCORDINGLY, WE SET ASIDE THE ORDER OF CIT(A) AND REMAN D THE MATTER BACK TO THE FILE OF ASSESSING OFFICER FOR ADJUDICATING AFRESH AS PER THE DIRECTIONS OF THE TRIBUNAL FOR ASSESSMENT YEAR 2008 - 09 (SUPRA) AND IN THE LIGHT OF JUDGMENT OF THE HONBLE BOMBAY HIGH COURT IN ASSESSEES OWN CASE FOR A.Y. 2002 - 03 (SUPR A). 7. IN THE RESULT , APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES . ORDER PRONOUNCED IN THE OPEN COURT ON THIS 15 TH DAY OF MAY 2015. SD/ - SD/ - (AMIT SHUKLA) (G.S. PANN U) (JUDICIAL MEMBER/ U;KF;D LNL; ) (ACCOUNTANT MEMBER/ YS[KK LNL; ) MUMBAI DATED 15 - 05 - 2015 SKS SR. P.S, METRO MOTORS AUTO DIVISION 4 | P A G E COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CONCERNED CIT(A) 4. THE CONCERNED CIT 5. THE DR, B BENCH, ITAT, MUMBAI BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCHES, MUMBAI