DCIT, CHENNAI V. TTK Health Care Ltd., CHENNAI

ITA 3361/CHNY/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 6255 (ITAT-CHENNAI)
• Duration Of Justice: 4 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-04-2019
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Appeal Filed On: 10-12-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: B SAGADEVAN
• Keywords: Revenue expenditure; Set aside

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, CHENNAI . . . , . !'# ! , % !& BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ ITA NOS.3361 & 3362/CHNY/2018 ( )( / ASSESSMENT YEARS : 2013-14 & 2014-15 THE DEPUTY COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE 3(1), CHENNAI - 600 034. V. M/S TTK HEALTHCARE LIMITED, NO.6, CATHEDRAL ROAD, GOPALAPURAM, CHENNAI - 600 086. PAN : AABCT 3312 J (+,/ APPELLANT) (-.+,/ RESPONDENT) +, / 0 / APPELLANT BY : SHRI B. SAGADEVAN, JCIT -.+, / 0 / RESPONDENT BY : SH. R. VIJAYARAGHAVAN, ADVOCATE SH. SAROJ KUMAR PARIDA, ADVOCATE 1 / 2% / DATE OF HEARING : 03.04.2019 3') / 2% / DATE OF PRONOUNCEMENT : 30.04.2019 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER : BOTH THE APPEALS OF THE REVENUE ARE DIRECTED AGAI NST THE COMMON ORDER PASSED BY THE COMMISSIONER OF INCOME T AX (APPEALS) -11, CHENNAI, DATED 25.09.2018 AND PERTAI N TO 2 I.T.A. NOS.3361 & 3362/CHNY/18 ASSESSMENT YEARS 2013-14 AND 2014-15. THEREFORE, W E HEARD BOTH THE APPEALS TOGETHER AND DISPOSING THE SAME BY THIS COMMON ORDER. 2. SHRI B. SAGADEVAN, THE LD. DEPARTMENTAL REPRESEN TATIVE, SUBMITTED THAT THE ONLY ISSUE ARISES FOR CONSIDERAT ION IS PAYMENT OF LOGO CHARGES TO M/S TT KRISHNAMACHARI & CO. AT THE RATE OF 0.5% OF THE SALES MADE BY THE ASSESSEE. REFERRING TO THE O RDER OF THE CIT(APPEALS), MORE PARTICULARLY PARA 6, THE LD. D.R . SUBMITTED THAT THE ASSESSEE APPEARS TO HAVE ENTERED INTO AN AGREEM ENT WITH TT KRISHNAMACHARI & CO., A PARTNERSHIP FIRM FOR USING THE MONOGRAM TITLED TTK. AS PER CLAUSE 1 OF THE AGREEMENT, AC CORDING TO THE LD. D.R., THE PAYMENT WAS MADE FOR USING THE LOGO / MON OGRAM FOR THREE YEARS FROM 1 ST APRIL, 2000. THERE WAS REFERENCE ABOUT THE APPROVAL SAID TO BE GRANTED BY GOVERNMENT OF INDIA BY AN ORDER DATED 3 RD MAY, 2000. ACCORDING TO THE LD. D.R., IT IS NOT K NOWN WHETHER THE AGREEMENT WAS SUBSEQUENTLY EXTENDED OR NOT. IF THE AGREEMENT WAS NOT EXTENDED, ACCORDING TO THE LD. D. R., THERE CANNOT BE ANY PAYMENT, THEREFORE, IT NEEDS TO BE VE RIFIED. 3. ON THE CONTRARY, SH. SAROJ KUMAR PARIDA, THE LD. COUNSEL FOR THE ASSESSEE, SUBMITTED THAT THE CIT(APPEALS) BY PL ACING RELIANCE ON THE ORDER OF THIS TRIBUNAL FOR THE ASSESSMENT YE ARS 2008-09 AND 3 I.T.A. NOS.3361 & 3362/CHNY/18 2009-10, ALLOWED THE CLAIM OF THE ASSESSEE AS REVEN UE EXPENDITURE. ON A QUERY FROM THE BENCH WHETHER THE AGREEMENT BET WEEN THE ASSESSEE AND TTK & CO., WHICH WAS WITH EFFECT FROM 1 ST APRIL, 2000 FOR A PERIOD OF THREE YEARS, WAS SUBSEQUENTLY RENEW ED OR NOT? THE LD.COUNSEL COULD NOT CLARIFY THE SAME. THE RENEWAL AGREEMENT WAS NOT PRODUCED BEFORE THIS TRIBUNAL. THERE WAS NO RE FERENCE ABOUT THE RENEWAL AGREEMENT IN THE IMPUGNED ORDERS OF THE LOWER AUTHORITIES. THE LD.COUNSEL PLACED HIS RELIANCE O N THE ORDER OF THIS TRIBUNAL IN I.T.A. NOS.1641, 1642 & 1643/MDS/2016 D ATED 25.11.2016 AND SUBMITTED THAT FOR THE ASSESSMENT YE ARS 2003-04, 2011-12 AND 2012-13, THIS TRIBUNAL CONFIRMED SIMILA R ORDERS OF THE CIT(APPEALS). 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. THE ASSESSEE CLAIMS PAYMENT OF 0.5% ON SALES AS LOGO CHARGES FOR USING THE MONOGRAM TTK IN ITS PRODUCT. WHEN AN IDENTICAL I SSUE CAME BEFORE THIS TRIBUNAL FOR ASSESSMENT YEARS 2003-04, 2011-12 AND 2012-13, THIS TRIBUNAL BY PLACING RELIANCE ON THE ASSESSEE'S OWN CASE FOR ASSESSMENT YEAR 2008-09 IN I.T.A. NO.2030/MDS/2011, ALLOWED THE CLAIM OF THE ASSESSEE AS REVENUE EXPENDITURE. THE FACT THAT THE 4 I.T.A. NOS.3361 & 3362/CHNY/18 INITIAL AGREEMENT WAS ONLY UPTO THREE YEARS FROM 1 ST APRIL, 2000 WAS NOT BROUGHT TO THE NOTICE OF THE TRIBUNAL IN THE EA RLIER OCCASION. THE ASSESSEE ALSO COULD NOT PRODUCE COPIES OF RENEWAL A GREEMENT IMMEDIATELY BEFORE THIS TRIBUNAL. IN THE ABSENCE O F AGREEMENT FOR RENEWAL FOR USAGE OF LOGO BETWEEN THE PARTIES, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE MATTER NEEDS TO BE RE-EXAMINED BY THE ASSESSING OFFICER. IN OTHER WORDS, THE ASSESSI NG OFFICER BEING THE ORIGINAL AUTHORITY, HAS TO EXAMINE WHETHER THE AGREEMENT BETWEEN THE PARTIES TO USE THE MONOGRAM TTK WAS R ENEWED SUBSEQUENTLY AND THEREAFTER THE ASSESSING OFFICER H AS TO DECIDE THE MATTER. THEREFORE, THE ORDERS OF BOTH THE AUTHORIT IES BELOW ARE SET ASIDE AND THE ENTIRE ISSUE IS REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER. THE ASSESSEE IS AT LIBERTY TO F ILE COPIES OF AGREEMENT FOR RENEWAL FOR USING THE MONOGRAM AND TH EREAFTER THE ASSESSING OFFICER SHALL DECIDE THE ISSUE IN ACCORDA NCE WITH LAW AFTER CONSIDERING THE DECISION OF THIS TRIBUNAL FOR THE ASSESSMENT YEARS 2003-04, 2011-12 AND 2012-13, AFTER GIVING A REASONABLE OPPORTUNITY TO THE ASSESSEE. 5. IN THE RESULT, BOTH THE APPEALS FILED BY THE REV ENUE ARE ALLOWED FOR STATISTICAL PURPOSES. 5 I.T.A. NOS.3361 & 3362/CHNY/18 ORDER PRONOUNCED IN THE COURT ON 30 TH APRIL, 2019 AT CHENNAI. SD/- SD/- (. !'# ! ) ( . . . ) (A. MOHAN ALANKAMONY) (N.R.S. GANESA N) % / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 5 /DATED, THE 30 TH APRIL, 2019. KRI. / -267 87)2 /COPY TO: 1. +, /APPELLANT 2. -.+, /RESPONDENT 3. 1 92 () /CIT(A)-11, CHENNAI 4. PRINCIPAL CIT-3, CHENNAI 5. 7: -2 /DR 6. ;( < /GF.