ACIT, CHENNAI V. TTK LIG Limited, CHENNAI

ITA 1587/CHNY/2015

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 96359 (ITAT-CHENNAI)
• Duration Of Justice: 4 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-11-2015
• Appeal Filed By: Department
• Bench Allotted: D
• Assessment Year: 2001-2002
• Appeal Filed On: 09-07-2015
• Court: TRIBUNAL
• Department Lawyers: DR MILIND MADHUKAR BHUSARI
• Keywords: Depreciation; Reasonable cause; Revenue expenditure

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH : CHENNAI . . . , . !' , # $ % [ BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ] ./ I.T.A.NOS.1587 TO 1589/MDS/2015 / ASSESSMENT YEARS : 2001-02, 2008-09 & 2009-10 THE ASSTT. COMMISSIONER OF INCOME-TAX CORPORATE CIRCLE 3(1) CHENNAI VS. M/S TTK LIG LIMITED NO.6, CATHEDRAL ROAD CHENNAI 600 086 [PAN AABCT 1184 G ] ( &' / APPELLANT) ( ()&' /RESPONDENT) / APPELLANT BY : DR.MILIND MADHUKAR BHUSARI, CIT /RESPONDENT BY : SHRI SAROJ KUM AR PARIDA, ADVOCATE / DATE OF HEARING : 03 - 11 - 2015 ! / DATE OF PRONOUNCEMENT : 13 - 1 1 - 2015 / O R D E R PER N.R.S.GANESAN, JUDICIAL MEMBER THESE APPEALS OF THE REVENUE ARE DIRECTED AGAINST SEPARATE ORDERS OF THE COMMISSIONER OF INCOME-TAX (APPEALS) -11, CHENNAI, DATED 13.3.2015, FOR ASSESSMENT YEARS 2001-02, 2008 -09 AND 2009- 10. SINCE COMMON ISSUES ARISE FOR CONSIDERATION IN ALL THE APPEALS, WE HEARD THEM TOGETHER AND DISPOSING OF THE SAME BY THIS COMMON ORDER. ITA NO.1587, 1588 & 1589/15 :- 2 -: 2. THERE WAS A DELAY OF THREE DAYS IN FILING THE APPEA LS BY THE REVENUE. THE REVENUE FILED APPLICATIONS FOR CONDON ATION OF DELAY. ACCORDING TO THE REVENUE, THE ORDER OF THE CIT(A) W AS COMMUNICATED ON 7.5.015. THE RECORDS WERE SENT TO THE CIT FOR E NDORSEMENT. HOWEVER, INADVERTENTLY, IT GOT MIXED UP WITH OTHER FILES, THEREFORE, THERE WAS A DELAY OF THREE DAYS IN FILING THE APPEA LS. WE HEARD SHRI SAROJ KUMAR PARIDA, LD. COUNSEL FOR THE ASSESSEE. THE LD. COUNSEL HAS NOT RAISED ANY SERIOUS OBJECTION TO CONDONE THE DEL AY. SINCE THE RECORDS WERE MIXED UP WITH OTHER FILES AND THE APPE ALS WERE FILED WITHIN A REASONABLE TIME AS SOON AS THE RECORDS WER E TRACED OUT, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THERE WA S A REASONABLE CAUSE ON THE PART OF THE REVENUE FOR NOT FILING THE APPEALS WITHIN THE STIPULATED TIME. ACCORDINGLY, THE DELAY OF THREE DAYS IS CONDONED AND THE APPEALS ARE ADMITTED. 3. THE FIRST ISSUE ARISES FOR CONSIDERATION IS EXPENDI TURE INCURRED BY THE ASSESSEE WITH REGARD TO PAYMENT OF LOGO CHARGES. 4. DR.MILIND MADHUKAR BHUSARI, LD. DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THE ASSESSEE DEBITED A SUM OF ` 2,10,34,867/- TOWARDS LOGO CHARGES. THE ASSESSEE CLAIMED BEFORE THE ASS ESSING OFFICER THAT THEY ENTERED INTO AN AGREEMENT WITH M/S T. T. KRISH NAMACHARI & COMPANY FOR USING THE TRADE NAME TTK. THE ASSES SEE CLAIMED THE ITA NO.1587, 1588 & 1589/15 :- 3 -: PAYMENT TOWARDS LOGO CHARGES AS REVENUE EXPENDITURE . ACCORDING TO THE LD. DR, THE PAYMENT MADE BY THE ASSESSEE TOWAR DS LOGO CHARGES IS CAPITAL IN NATURE, THEREFORE, ENTITLED FOR DEPRE CIATION @ 25%. HENCE, THE ASSESSING OFFICER DISALLOWED THE CLAIM OF THE ASSESSEE, HOWEVER, ALLOWED DEPRECIATION @ 25%. HOWEVER, ON APPEAL BY THE ASSESSEE, THE CIT(A), BY FOLLOWING THE ORDER OF THIS TRIBUNAL IN ASSESSEES OWN CASE FOR ASSESSMENT YEARS 2002-03 TO 2007-08 FOUND THAT THE PAYMENT TOWARDS LOGO CHARGES IS EXCLUSIVELY FOR THE PURPOSE OF BUSINESS HENCE, IT HAS TO BE ALLOWED. THIS TRIBUNAL, IN FACT, CON FIRMED AN IDENTICAL ORDER OF THE CIT(A) AND CIT(A) FOLLOWED THE ORDER O F THIS TRIBUNAL. ACCORDING TO THE LD. DR, THE REVENUE HAS FILED AN A PPEAL BEFORE THE HIGH COURT AGAINST THE ORDER OF THIS TRIBUNAL AND T O KEEP THE MATTER ALIVE, THE PRESENT APPEAL IS FILED BEFORE THIS TRIB UNAL. 5. THE LD. DR FURTHER SUBMITTED THAT THE NEXT GROUND IS WITH REGARD TO PAYMENT OF ROYALTY. REFERRING TO THE OR DER OF THE ASSESSING OFFICER, THE LD. DR POINTED OUT THAT THE ASSESSEE HAS PAID FEE FOR TECHNICAL KNOW-HOW, HOWEVER, CLAIMED THE SAME AS RO YALTY. THE ASSESSING OFFICER FOUND THAT THE FEE FOR TECHNICAL KNOW-HOW HAS TO BE CAPITALIZED AND THE ASSESSEE IS ENTITLED FOR DEPRE CIATION. HOWEVER, ON APPEAL, THE CIT(A) BY FOLLOWING THE ORDER OF THIS T RIBUNAL FOR ASSESSMENT YEARS 2002-03 TO 2007-08 IN ASSESSEES OWN CASE, DELETED THE ADDITION ON THE GROUND THAT THE PAYMENT OF ROYA LTY IS IN THE ITA NO.1587, 1588 & 1589/15 :- 4 -: REVENUE FIELD. THE APPEAL OF THE REVENUE AGAINST T HE ORDER OF THIS TRIBUNAL IS PENDING BEFORE THE HIGH COURT, THEREF ORE, THE REVENUE FILED THE APPEAL BEFORE THIS TRIBUNAL. 6. WE HEARD SHRI SAROJ KUMAR PARIDA, LD. COUNSEL FOR T HE ASSESSEE ALSO. 7. ADMITTEDLY, THE ASSESSEE HAS PAID LOGO CHARGES AND ROYALTY TO M/S T.T.KRISHNAMACHARI & COMPANY AND CLAIMED THE SAME AS REVENUE EXPENDITURE. HOWEVER, THE ASSESSING OFFICE R TREATED BOTH THE PAYMENTS AS CAPITAL IN NATURE AND ALLOWED DEPRECIAT ION @ 25%. THE CIT(A) BY FOLLOWING THE ORDER OF THIS TRIBUNAL IN ASSESSEES OWN CASE FOR ASSESSMENT YEARS 2002-03 TO 2007-08 ALLOWED THE CLAIM OF THE ASSESSEE BY HOLDING THAT THE PAYMENTS ARE IN THE RE VENUE FIELD. WE HAVE CAREFULLY GONE THROUGH THE ORDER OF THIS TRIBU NAL IN ASSESSEES OWN CASE FOR ASSESSMENT YEARS 2002-03 TO 2007-08. THIS TRIBUNAL FOUND THAT THE PAYMENT OF ROYALTY AND LOGO CHARGES ARE REVENUE IN NATURE, THEREFORE, HAS TO BE ALLOWED WHILE COMPUTIN G THE TAXABLE INCOME. IN VIEW OF THE ORDER OF THIS TRIBUNAL IN ASSESSEES OWN CASE FOR ASSESSMENT YEARS 2002-03 TO 2007-08, THIS TRIBU NAL DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF THE LOWER AUT HORITY. MERELY BECAUSE AN APPEAL AGAINST THE ORDER OF THIS TRIBUNA L IS SAID TO BE PENDING BEFORE THE HIGH COURT, THAT CANNOT BE A REA SON TO TAKE A ITA NO.1587, 1588 & 1589/15 :- 5 -: DIFFERENT VIEW. THEREFORE, FOLLOWING THE ORDER OF THIS TRIBUNAL AND FOR THE REASONS STATED THEREIN, THE ORDER OR THE CIT(A) IS CONFIRMED. 8. IN THE RESULT, ALL THE APPEALS OF THE REVENUE STAN D DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 13 TH NOVEMBER, 2015, AT CHENNAI. SD/- SD/- ( . !' ) (A. MOHAN ALANKAMONY) # / ACCOUNTANT MEMBER ( . . . ' ) (N.R.S. GANESAN) / JUDICIAL MEMBER #$ / CHENNAI %& / DATED: 13 TH NOVEMBER, 2015 RD &' ()*) / COPY TO: 1 . / APPELLANT 4. + / CIT 2. / RESPONDENT 5. ),- . / DR 3. +/' / CIT(A) 6. -01 / GF