DCIT, New Delhi V. M/s ICRA Ltd., New Delhi

ITA 2856/DEL/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 74385 (ITAT-DELHI)
• Duration Of Justice: 10 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-03-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 24-02-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 09-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SATPAL SINGH
• Assessee Lawyers: APPEARED NAME NOT KNOWN
• Keywords: Depreciation; Capital expenditure

Judgement Text

INCOME TAX APPELLATE TRIBUNAL DELHI BENCH C : NEW DELHI BEFORE SHRI G. D. AGARWAL, HONBLE VICE PRESIDENT AND SHRI A. T. VARKEY, JUDICIAL MEMBER ITA NO. 2856 /DEL/ 2013 (ASSESSMENT YEAR: 2009 - 10 ) DCIT CIRCLE - 11(1), NEW DELHI VS. ICRA LTD., 1105, KAILASH BUILDING, 11 TH FLOOR, 26, KASTURBA GANDI MARG, NEW DELHI PAN: AAACI0218B (APPELLANT) (RESPONDENT) APPELLANT BY : SATPAL SINGH, SR. DR RESPONDENT BY: APPEARED - NAME NOT KNOWN O R D E R PER A. T. VARKEY , JUDICIAL MEMBER THIS IS AN APPEAL PREFERRED BY THE REVENUE AGAINST THE ORDER OF THE LD CIT(A) - X V , NEW DELHI DATED 22.02.2013 FOR THE ASSESSMENT YEAR 2009 - 10 . 2. IN THIS APPEAL THE LD AR, APPEARED AND PRESENTED THE CASE OF THE ASSESSEE, HOWEVER NEITHER WE COULD FIND HIS POWER OF ATTORNEY IN THE FILE NOR DID HE FURNISH HIS NAME TO THE COURT MASTER, SO WE ARE UNABLE TO MARK HIS PRESENCE. 2. THE GROUNDS OF APPEAL ARE AS FOLLOWS: - 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 25,41,045/ - ON ACCOUNT OF SALE OF TECHNICAL KNOW HOW FEES. 2. THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR AMEND ANY GROUND OF APPEAL RAISED ABOV E AT THE TIME OF HEARING. 3. BRIEF FACT S OF THE CASE ARE THAT THE ASSESSEE COMPANY IS ENGAGED IN THE BUSINESS OF THE CREDIT RATING, INFORMATION AND BOP SERVICES. THE ASSESSEE PAID TECHNICAL KNOW - HOW FEES TO M/S. MOODYS INVESTOR SERVICES, WHO IS ONE OF THE SHAREHOLDERS OF THE ASSESSEE COMPANY. M/S. MOODYS HAS BEEN GIVING PROFESSIONAL SERVICES TO THE ASSESSEE FROM THE YEAR 1999 ONWARDS. THE ASSESSEE COMPANY HAS BEEN PAYING TECHNICAL FEES FROM THE FINANCIAL YEAR ENDING 31 ST MARCH, 2000 TO 31.03.2011. DURING THE YEAR UNDER CONSIDERATION THE ASSESSEE PAGE NO. 2 CLAIMED EXPENSES OF RS. 25,41,045/ - BEING THE TECHNICAL KNOW - HOW FEES. THE CASE WAS TAKEN BY UP FOR SCRUTINY . THE ASSESSEE WAS ASKED TO JUSTIFY WHY THE S AME AMOUNT SHOULD NOT BE TREATED AS CAPITAL EXPENDITURE AS THE SAME IS GIVING ENDURING BENEFITS TO THE BUSINESS OF ASSESSEE. PURSUANT TO THE SAID QUERY THE ASSESSEE SUBMITTED THAT THE TECHNICAL KNOW - HOW FEES IS ACTUALLY IN THE NATURE OF PROFESSIONAL FEES P AID ON A REGULAR BASIS TO M/S. MOODYS INVESTOR SERVICES FOR UTILIZING THEIR SERVICES BASED ON A TECHNICAL SERVICES AGREEMENT AND TDS IS BEING DULY DEDUCTED ON THE SAME. HOWEVER THE ASSESSING OFFICER WAS NOT SATISFIED BY THE REPLY AND HELD THAT THE EXPENSE S ON TECHNICAL KNOW - HOW ARE BEING CAPITALIZED AND THE DEPRECIATION WAS ALLOWED @15%, AND THUS NET DISALLOWANCE COMES TO RS. 21,59,888/ - . 4. AGGRIEVED BY THE SAID ORDER OF THE ASSESSING OFFICER , THE ASSESSEE PREFERRED A N APPEAL BEFORE THE LD CIT(A) , WHO WAS PLEASED TO ALLOW THE SAID APPEAL. AGGRIEVED BY THE SAID ORDER OF THE LD CIT(A) THE REVENUE IS BEFORE US. 5. AT THE OUTSET THE LD AR BROUGHT TO OU R NOTICE THAT IN THE ASSESSES OWN CASE FOR ASSESSMENT YEAR 2008 - 09 , THE SAME ISSUE WAS AGITATED BY T HE REVENUE IN THE APPEAL AGAINST THE ASSESSEE BEFORE THE TRIBUNAL, AND THE CO - ORDINATE BENCH OF THIS TRIBUNAL HAS DISMISSED THE APPEAL PREFERRED BY THE REVENUE. WE HAVE GONE THROUGH THE ORDER OF THE CO - ORDINATE BENCH AND WE FIND THAT BY ORDER DATED 31.10.2 012 THE BENCH HELD AS FOLLOWS: - 7. WE HAVE HEARD BOTH THE SIDES, CONSIDERED THE MATERIAL ON RECORD AND FIND THAT SIMILAR ISSUES AROSE IN THE CASE OF THE ASSESSEE FOR AYS 2003 - 04 & 2004 - 05 AND LD CIT(A) IN APPEAL BEFORE IT, HAS ALLOWED THE CLAIM OF THE ASS ESSEE AGAINST WHICH NO APPEAL HAS BEEN FILED BY THE DEPARTMENT. MOREOVER, FOR EARLIER AND SUBSEQUENT YEARS, SIMILAR TYPES OF CLAIM WAS MADE BY THE ASSESSEE FROM ASSESSMENT YEAR 1999 - 2000 ONWARDS AND NONE OF THESE YEARS SUCH DISALLOWANCE HAS BEEN MADE. KEEP ING ENTIRETY OF FACTS AND CIRCUMSTANCES, PAST HISTORY AND OTHER RELEVANT CONSIDERATION, WE ARE OF THE VIEW THAT ADDITION MADE BY THE ASSESSING OFFICER WAS NOT CALLED FOR WHICH HAS RIGHTLY BEEN DELETED BY THE LD CIT(A). THEREFORE, WHILE UPHOLDING THE ORDER OF THE LD CIT(A) IN THIS REGARD, WE DISMISS THE APPEAL OF THE REVENUE. 6. RESPECTFULLY FOLLOWING THE SAID ORDER OF THE CO - ORDINATE BENCH , WE DISMISS THE APPEAL PREFERRED BY THE REVENUE AND THE ORDER OF THE LD CIT(A) IS SUSTAINED. PAGE NO. 3 7. IN THE RESULT TH E APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 2 8 . 03 .2014. - S D / - - S D / - ( G. D. AGARWAL) (A. T. VARKEY) V I C E P R E SIDENT JUDICIAL MEMBER DATED : 2 8 / 03 /2014 A K KEOT COPY FORWARDED TO 1. APPLICANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI