ACIT Corporate Circle 6(1), CHENNAI V. Shriram Fortune Solutions Ltd., CHENNAI

ITA 2050/CHNY/2018

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 2695 (ITAT-CHENNAI)
• Duration Of Justice: 4 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-11-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2014-2015
• Appeal Filed On: 28-06-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: CLEMENT RAMESHKUMAR ADDITIONAL
• Assessee Lawyers: RAGHA RAJEEV MENON
• Keywords: Earning of tax free income; Revenue expenditure
• Section: 37(1)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : CHENNAI . , !'# $ , BEFORE SHRI ABRAHAM P GEORGE, ACCOUNTANT MEMBER AND SHRI GEORGE MATHAN, JUDICIAL MEMBER ./ I.T.A.NO.2050/CHNY/2018 / ASSESSMENT YEAR : 2014-15 THE DY. COMMISSIONER OF INCOME TAX CORPORATE CIRCLE 6(1) CHENNAI-34. VS. M/S SHRIRAM FORTUN E SOLUTIONS LTD., NO.66, II FLOOR, CITY CENTRE COMPLEX THIRUMALAI PILLAI ROAD T. NAGAR, CHENNAI 600 017 [PAN AAACS 7708 N] ( $% / APPELLANT) ( &'$% /RESPONDENT) / APPELLANT BY : MR.CLEMENT RAMESHKUMAR, ADDITIONAL CIT D.R /RESPONDENT BY : MR.RAGHA RAJEEV MENON, ADVOCATE ! ' #$% / DATE OF HEARING : 07 - 11 - 201 8 &' #$% / DATE OF PRONOUNCEMENT : 07 - 11 - 201 8 ( / O R D E R PER GEORGE MATHAN , JUDICIAL MEMBER THIS IS AN APPEAL FILED BY THE REVENUE AGAINST T HE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-15, CHENN AI IN ITA ITA NO.2050/CHNY/2018 :- 2 -: NO.402/2016-17/CIT(A)-15 DATED 28.03.2018 FOR THE ASSESSMENT YEAR 2014-15. 2. SHRI CLEMENT RAMESHKUMAR REPRESENTED ON BEHALF OF THE REVENUE AND SHRI RAGHA RAJEEV MENON, REPRESENTED ON BEHALF OF THE ASSESSEE. 3. IT WAS SUBMITTED BY LD.D.R THAT GROUND NO.2 & 2.1 IS AGAINST THE ACTION OF LD.CIT(A) IN ALLOWING THE ROYALTY CLA IM OF THE ASSESSEE AS A REVENUE EXPENDITURE. IT WAS SUBMITTED BY LD.A.R T HAT THE ISSUE WAS SQUARELY COVERED BY THE DECISION OF THE CO-ORDINATE BENCH OF THIS TRIBUNAL IN ASSESSEE'S OWN CASE IN ITA NO.2893/MDS. /2016, VIDE ORDER DATED 05.05.2017 WHEREIN FOLLOWING THE DECISION OF CO-ORDINATE BENCH OF THIS TRIBUNALIN ITA NO.406/MDS./2016 DATED 29.07 .2016 HAS HELD AS FOLLOWS:- 10. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITHER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. SHRIRAM OWNERSHIP TRUST IS A TRUST BY ITSELF, THEREFORE, ITS LOGO CANNOT BE USED BY ANY OTHER CONCERN. THE OBJECT OF THE TRUST IS NOT TO DO BUSINESS. THE ASSESSEE-COMPANY WAS ESTABLISHED FOR THE PURPOSE OF BUSINESS. WHEN THE ASSESSEE- COMPANY USED THE LOGO BELONGS TO SHRIRAM OWNERSHIP TRUST, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT FOR THE PURPOSE OF USING THE LOGO, THE ASSESSEE HAS TO NECESSARILY MAKE THE PA YMENT. IN THE CASE BEFORE US, THE PAYMENT WAS MADE ON TURNOVER BASIS, THEREFORE, THE ITA NO.2050/CHNY/2018 :- 3 -: SAME HAS TO BE ALLOWED AS REVENUE EXPENDITURE U/S 37(1) OF THE ACT. THIS TRIBUNAL DO NOT FIND ANY REASON TO INTERFERE W ITH THE ORDER OF THE CIT(A) AND ACCORDINGLY, THE SAME IS CONFIRMED. 3.1 IN RESPECT OF GROUNDS NOS.3 TO 3.8, IT WAS SUB MITTED BY LD.D.R THAT THE ISSUE WAS AGAINST THE ACTION OF TH E LD.CIT(A) IN DELETING THE DISALLOWANCE MADE U/S.14A OF THE ACT R EAD WITH RULE 8D OF THE INCOME TAX RULES,1962. IT WAS SUBMITTED BY LD.A.R THAT THE ISSUE WAS SQUARELY COVERED BY THE DECISION OF JURIS DICTIONAL HIGH COURT IN THE CASE OF M/S.REDINGTON INDIA LTD., VS. ACIT R EPORTED IN 392 ITR 633(MAD.). IT WAS A SUBMISSION THAT THE ASSESSEE DI D NOT EARN ANY EXEMPT INCOME OR DIVIDEND INCOME DURING THE YEAR OU T OF THE INVESTMENTS, AND CONSEQUENTLY NO DISALLOWANCE WAS C ALLED FOR. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. IN RE SPECT OF GROUND NOS.2 & 2.1, AS IT IS NOTICED THAT THIS ISSU E IS SQUARELY COVERED BY THE DECISION OF CO-ORDINATE BENCH OF THIS TRIBUN AL IN ASSESSEE'S OWN CASE FOR ASSESSMENT YEAR 2013-14 REFERRED TO SUPRA, RESPECTFULLY FOLLOWING THE DECISION OF TRIBUNAL, THE ORDER OF TH E CIT(APPEALS) ON THIS ISSUE STANDS CONFIRMED. IN RESPECT OF GROUN D NOS.3 TO 3.8, AS IT IS NOTICED THAT THE ASSESSEE HAS NOT RECEIVED ANY E XEMPT INCOME, RESPECTFULLY FOLLOWING THE DECISION OF HONBLE JURI SDICTIONAL HIGH COURT ITA NO.2050/CHNY/2018 :- 4 -: IN THE CASE OF M/S.REDINGTON INDIA REFERRED TO SUP RA, FINDING OF THE LD.CIT(A) ON THIS ISSUE STANDS CONFIRMED. 5. IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED. ORDER PRONOUNCED ON 07 TH NOVEMBER, 2018, AT CHENNAI. SD/ - SD/ - ( () . +,+ ) ( ABRAHAM P GEORGE) / ACCOUNTANT MEMBER ( $ ) (GEORGE MATHAN) ) / JUDICIAL MEMBER . ' / CHENNAI / / DATED: 07 TH NOVEMBER, 2018. K S SUNDARAM 0 #12 3 2# / COPY TO: 1 . / APPELLANT 3. ! 4# () / CIT(A) 5. 267 #8 / DR 2. / RESPONDENT 4. ! 4# / CIT 6. 79 :' / GF