DCIT CORPORATE CIRCLE-3(1), CHENNAI V. TTK Healthcare Ltd., CHENNAI

ITA 1650/CHNY/2019

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 8421 (ITAT-CHENNAI)
• Duration Of Justice: 4 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-10-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2015-2016
• Appeal Filed On: 27-05-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M. SRINIVASA RAO
• Keywords: Revenue expenditure

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, CHENNAI . . . , !' #, % !& BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER ./ ITA NO.1650/CHNY/2019 ) *) / ASSESSMENT YEAR : 2015-16 THE DEPUTY COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE 3(1), CHENNAI - 600 034. V. M/S TTK HEALTHCARE LTD., NO.6, CATHEDRAL ROAD, GOPALAPURAM, CHENNAI - 600 086. PAN : AABCT 3312 J (,-/ APPELLANT) (./,-/ RESPONDENT) ,- 0 1 / APPELLANT BY : DR. M. SRINIVASA RAO, CIT ./,- 0 1 / RESPONDENT BY : SH. R. VIJAYARAGHAVAN, ADVOCAT E 2 0 '% / DATE OF HEARING : 18.09.2019 3#* 0 '% / DATE OF PRONOUNCEMENT : 09.10.2019 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER : THIS APPEAL OF THE REVENUE IS DIRECTED AGAINST TH E ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) -11, CHENNAI, DATED 21.03.2019 AND PERTAINS TO ASSESSMENT YEAR 2015-16. 2. THE FIRST ISSUE ARISES FOR CONSIDERATION IS DISA LLOWANCE OF LOGO CHARGES PAID AT THE RATE OF 0.5%. 2 I.T.A. NO.1650/CHNY/19 3. DR. M. SRINIVASA RAO, THE LD. DEPARTMENTAL REPRE SENTATIVE, SUBMITTED THAT THE ASSESSEE HAS PAID 0.5% OF THE SA LES TO ITS GROUP CONCERN FOR USING THE TRADE NAME AND MONOGRAM. ACC ORDING TO THE LD. D.R., THIS EXPENDITURE WITH REGARD TO PAYMENT OF LO GO CHARGES IS CAPITAL IN NATURE, THEREFORE, IT CANNOT BE ALLOWED AS REVENUE EXPENDITURE. HOWEVER, THE CIT(APPEALS) ALLOWED THE CLAIM OF THE ASSESSEE BY PLACING RELIANCE ON THE ORDER OF THIS TRIBUNAL IN THE ASSES SEE'S OWN CASE. ACCORDING TO THE LD. D.R., THE REVENUE HAS FILED AP PEAL BEFORE THE HIGH COURT AND THE SAME IS PENDING FOR ADJUDICATION, THE REFORE, THE CIT(APPEALS) OUGHT NOT TO HAVE FOLLOWED THE ORDER O F THIS TRIBUNAL. 4. WE HEARD SH. R. VIJAYARAGHAVAN, THE LD.COUNSEL F OR THE ASSESSEE ALSO. IT IS NOT IN DISPUTE THAT THE LOGO CHARGES PAID BY THE ASSESSEE AT THE RATE OF 0.5% ON THE BASIS OF THE AG REEMENT WAS ALLOWED AS REVENUE EXPENDITURE BY THE ORDER OF THIS TRIBUNA L FOR THE EARLIER YEAR. THE REVENUE HAS ALREADY FILED AN APPEAL BEFORE THE HIGH COURT AND IT IS PENDING FOR ADJUDICATION. IT IS NOT THE CASE OF TH E REVENUE THAT THE ORDER OF THIS TRIBUNAL WAS STAYED BY THE HIGH COURT. IN THOSE CIRCUMSTANCES, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT IN VIEW OF THE DECISION OF THE CO-ORDINATE BENCH OF THIS TRIBUNAL IN THE ASSES SEE'S OWN CASE FOR EARLIER ASSESSMENT YEAR, THE PAYMENT OF LOGO CHARGE S HAS TO BE ALLOWED AS REVENUE EXPENDITURE. A MERE PENDING OF APPEAL B EFORE THE HIGH COURT CANNOT BE A REASON TO TAKE A DIFFERENT VIEW. THEREFORE, THIS 3 I.T.A. NO.1650/CHNY/19 TRIBUNAL DO NOT FIND ANY REASON TO INTERFERE WITH T HE ORDER OF THE LOWER AUTHORITY AND ACCORDINGLY THE SAME IS CONFIRMED. 5. NOW COMING TO THE NEXT ISSUE OF DISALLOWANCE MAD E BY THE ASSESSING OFFICER UNDER SECTION 40A(2) OF THE INCOM E-TAX ACT, 1961 (IN SHORT 'THE ACT') TOWARDS DEPOT SERVICE CHARGES. 6. DR. M. SRINIVASA RAO, THE LD. D.R. SUBMITTED THA T THE CIT(APPEALS) ALLOWED THE CLAIM OF THE ASSESSEE ON T HE GROUND THAT IT WAS PAID OVER AND ABOVE THE MARKET RATE TO NON-RELATED PARTIES. EVEN THOUGH A SIMILAR PAYMENT WAS ALLOWED BY THIS TRIBUNAL FOR EARLIER ASSESSMENT YEAR, ACCORDING TO THE LD. D.R., AN APPEAL WAS FILE D BY THE REVENUE BEFORE THE HIGH COURT AND THE SAME IS PENDING BEFOR E THE HIGH COURT FOR ADJUDICATION. 7. WE HEARD SH. R. VIJAYARAGHAVAN, THE LD.COUNSEL F OR THE ASSESSEE, ALSO. THIS TRIBUNAL FINDS THAT A SIMILAR PAYMENT TOWARDS DEPOT SERVICE CHARGES WAS ALLOWED BY THIS TRIBUNAL FOR EA RLIER ASSESSMENT YEAR. A MERE PENDING OF APPEAL AGAINST THE ORDER OF THIS TRIBUNAL BEFORE THE HIGH COURT CANNOT BE A REASON TO TAKE A DIFFERENT V IEW. MOREOVER, IT IS NOT THE CASE OF THE REVENUE THAT THE ORDER OF THIS TRIBUNAL WAS STAYED BY THE HIGH COURT. IN THOSE CIRCUMSTANCES, THIS TRIBU NAL DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF THE LOWER AUT HORITY AND ACCORDINGLY THE SAME IS CONFIRMED. 4 I.T.A. NO.1650/CHNY/19 8. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. ORDER PRONOUNCED IN THE COURT ON 9 TH OCTOBER, 2019 AT CHENNAI. SD/- SD/- ( !' #) ( . . . ) (RAMIT KOCHAR) (N.R.S. GANESAN) % / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 5 /DATED, THE 9 TH OCTOBER, 2019. KRI. 0 .' 6 76*' /COPY TO: 1. ,- /APPELLANT 2. ./,- /RESPONDENT 3. 2 8' () /CIT(A)-11, CHENNAI 4. PRINCIPAL CIT-3, CHENNAI 5. 69 .' /DR 6. ) : /GF.