ACIT, New Delhi V. M/s G4s Security Systems (India) Pvt. Ltd., Gurgaon

ITA 2125/DEL/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 74348 (ITAT-DELHI)
• Duration Of Justice: 11 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-03-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 12-03-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 11-04-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SATPAL SINGH SENIOR
• Assessee Lawyers: ARUN BANSAL
• Keywords: Royalty expenses; Revenue expenditure

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH C : NEW DELHI) BEFORE SHRI B.C. MEENA, ACCOUNTANT MEMBER AND SHRI A.T. VARKEY, JUDICIAL MEMBER ITA NO.2125/DEL./2013 (ASSESSMENT YEAR : 2009-10) ACIT, CIRCLE 12 (1), VS. M/S. G4S SECURITY SYSTEM S (INDIA) PVT. LTD., NEW DELHI. PANCHWATI, 82A, SECTOR 18, GURGAON (HARYANA). (PAN : AAACG2185M) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI ARUN BANSAL, CA REVENUE BY : SHRI SATPAL SINGH, SENIOR DR ORDER PER B.C. MEENA, ACCOUNTANT MEMBER : THIS APPEAL FILED BY THE REVENUE EMANATES FROM THE ORDER OF CIT (APPEALS)-XV, NEW DELHI DATED 24.01.2013 FOR THE AS SESSMENT YEAR 2009-10. 2. THE ASSESSEE COMPANY ENGAGED IN THE BUSINESS OF PROVIDING AND INSTALLING THE SECURITY SYSTEMS, VIZ., CCTV SYSTEMS ETC. THE RETURN OF INCOME WAS FILED DECLARING A LOSS OF RS.1,99,38,274/- ON 1 5.10.2010. THE ASSESSING OFFICER MADE AN ADDITION OF ROYALTY PAID OF RS.12,7 5,823/- TO M/S. GROUP 4 HOLDING WHICH IS 75% OF THE ROYALTY PAID AND DEPREC IATION OF 25% WAS ALLOWED. THE CIT (A) ALLOWED THE CLAIM OF THE ASSE SSEE AS REVENUE EXPENDITURE. THE RELEVANT PARA OF THE CIT (A) READ AS UNDER :- ITA NO.2125/DEL./2013 2 5. I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CA SE, ORDER OF THE A.D. AND THE DETAILED SUBMISSION MADE BY THE LE ARNED AR IN THE LIGHT OF SEVERAL JUDICIAL PRONOUNCEMENTS IN THI S REGARD. SINCE ON SAME FACTS THE HON'BLE DELHI HIGH COURT IN THE C ASE OF APPELLANT COMPANY HAS ALREADY DISMISSED THE DEPARTM ENTAL APPEAL IN EARLIER YEARS AND HELD THE ROYALTY EXPENS ES AS REVENUE IN NATURE AND NOT CAPITAL, FINALITY IN THE MATTER H AS BEEN ATTAINED. 5.2 IN VIEW OF THE SAME, RESPECTFULLY FOLLOWING THE DECISION OF THE HON'BLE DELHI HIGH COURT IN THE APPELLANT'S OWN CASE FOR A.Y. 2002-03, 2003-04 AND 2005-06, I HOLD THAT THE PAYMENT OF ROYALTY IN THE PRESENT CASE AS ALLOWABLE REVENUE EX PENDITURE. THEREFORE, THE GROUND NO.1 OF THE APPEAL IS ALLOWED IN FAVOUR OF THE APPELLANT. 3. NOW, THE REVENUE IS IN APPEAL BY TAKING THE FOLL OWING GROUNDS :- 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT (A) HAS ERRED IN DELETING THE DISALLOWA NCE OF ROYALTY EXPENSES OF RS.12,75,823/- HOLDING THE SAME AS REVENUE EXPENDITURE. 2. THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR AMEN D ANY GROUND OF APPEAL RAISED ABOVE AT THE TIME OF HEARIN G. 4. AT THE OUTSET OF THE HEARING, THE LD. AR SUBMITT ED THAT THIS ISSUE IS COVERED BY THE DECISION OF ITAT IN ASSESSEES OWN C ASE IN THE ASSESSMENT YEARS 2007-08 AND 2008-09 IN ITA NOS.485/DEL/2012 A ND 486/DEL/2012 DATED 20.04.2012. 5. WE HAVE HEARD BOTH THE SIDES ON THE ISSUE. WE F IND THAT THE ITAT HAS GRANTED THE RELIEF TO THE ASSESSEE RELYING ON THE D ECISION OF HON'BLE DELHI HIGH COURT IN THE ASSESSEES OWN CASE FOR ASSESSMEN T YEARS 2002-03, 2003- 04 AND 2005-06. THE ITAT HAS ALLOWED THE CLAIM OF THE ROYALTY AS REVENUE ITA NO.2125/DEL./2013 3 EXPENDITURE IN ASSESSEES OWN CASE IN ASSESSMENT YE ARS 2007-08 AND 2008- 09 VIDE ITS ORDER DATED 20.12.2012. IN VIEW OF THE SE FACTS AND CIRCUMSTANCES OF THE CASE, WE FIND NO MERITS IN THE APPEAL OF THE REVENUE AND THE SAME IS DISMISSED. 6. IN THE RESULT, THE APPEAL OF THE REVENUE STANDS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON THIS 12 TH DAY OF MARCH, 2014. SD/- SD/- (A.T. VARKEY) (B.C. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED THE 12 TH DAY OF MARCH, 2014 TS COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A)-XV, NEW DELHI. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.