Jubilant FoodWorks Ltd., Noida V. ACIT, New Delhi

ITA 4626/DEL/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 81799 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 1 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-10-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 07-05-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 29-08-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: S N BHATIA
• Assessee Lawyers: VIKAS SRIVASTAVA
• Keywords: Depreciation; Diversion of income; Wholly owned subsidiary; Bad and doubtful debts; Revenue expenditure; Capital expenditure
• Section: 143(3); 37(1)

Judgement Text

INCOME TAX APPELLATE TRIBUNAL DELHI BENCH D : NEW DELHI BEFORE SHRI G. D. AGARWAL, HONBLE VICE PRESIDENT AND SHRI A. T. VARKEY, JUDICIAL MEMBER ITA NO. 4626 /DEL/ 2012 (ASSESSMENT YEAR: 2008 - 09 ) JUBILANT FOODWORKS LTD., B - 214, PHASE - 2, NOIDA VS. ACIT CIRCLE - 4(1) NEW DELHI (APPELLANT) (RESPONDENT) ITA NO. 4681 /DEL/ 2012 (ASSESSMENT YEAR: 2008 - 09 ) DCIT CIRCLE - 4(1) NEW DELHI VS. JUBILANT FOOD WORKS LTD, 1517, DEVIKA TOWER, 6, NEHRU PLACE, NEW DELHI PAN:AABCD1821C (APPELLANT) (RESPONDENT) ITA NO. 5921 /DEL/ 2012 (ASSESSMENT YEAR: 2007 - 08 ) DOMINOS PIZZA INDIA LTD., (NOW KNOWN AS JUBILANT FOODWORDS LTD.) B - 214, PHASE - 2, NOIDA PAN:AABCD1821C VS. DCIT CIRCLE - 4(1) NEW DELHI (APPELLANT) (RESPONDENT) APPELLANT BY : VIKAS SRIVASTAVA, ADV RESPONDENT BY : S.N. BHATIA , SR. DR O R D E R PER A. T. VARKEY , JUDICIAL MEMBER THESE 3 (THREE) APPEALS RELATING TO ASSESSMENT YEAR 2007 - 08 AND 2008 - 09 INVOLVES CONSIDERATION OF COMMON ISSUES HAVE BEEN HEARD TOGETHER AND THEREFORE DISPOSED OFF BY THIS CONSOLIDATED ORDER. PAGE 2 OF 11 2. WE TAKE UP FIRST THE CROSS - APPEALS FILED BY THE ASSESSEE AND REVENUE FOR ASSESSMENT YEAR 2008 - 09. THE FACTUAL MATRIX IN BRIEF IS THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF MANUFACTURE AND SALE OF PIZZAS AND RELATED FAST FOOD PRODUCTS AND SALE OF BEVERAGE. FOR THE INSTANT YEAR ASSESSEE FILED RETURN DECLARING NI L INCOME ON 30THE JULY 2008; WHICH WAS ASSESSED U/S 143(3) ON 23 RD DECEMBER 2010, AFTER MAKING CERTAIN DISALLOWANCE. THE LD CIT(A), ALLOWED PART RELIEF TO THE ASSESSEE AND AS SUCH, THE CROSS - APPEAL BEFORE US. 3. IN ITA NO.4626/DEL/2012 THE ASSESSEE HAS RAI SED THE FOLLOWING GROUNDS: - 1. THE ORDER PASSED BY THE LD COMMISSIONER OF INCOME TAX (APPEALS) (LD. CIT(A)) UNDER SECTION 250 OF THE INCOME TAX ACT, 1961 (THE ACT) IS BAD IN LAW AND ON FACTS AND CIRCUMSTANCES OF THE CASE. 2. THE LD CIT(A), AS WELL AS LD ASSESSING OFFICER (HEREINAFTER REFERRED AS AO) HAVE ERRED IN LAW AND ON THE FACTS AND CIRCUMSTANCES OF THE CASE BY HOLDING THAT ROYALTY AMOUNT OF RS.617,289 FROM DP LANKA PVT LTD HAS ACTUALLY ACCRUED TO THE APPELLANT DURING THE RELEVANT PERIOD. 3. T HE LD CIT(A) HAS ALSO ERRED IN LAW BY IGNORING THE JUDICIAL PRECEDENTS ON ACCRUAL OF INCOME RELIED ON BY THE APPELLANT. 4. THE LD CIT(A) AS WELL AS THE LD AO HAD ERRED IN LAW AND ON FACTS AND CIRCUMSTANCES OF THE CASE BY DISALLOWING THE EXPENSES CLAIMED B Y THE APPELLANT ON ACCOUNT OF SUNDRY BALANCE WRITTEN OFF AMOUNTING TO RS.279,564/ - MERELY ON THE GROUND THAT THE APPELLANT WAS NOT ABLE TO PROVIDE THE DETAILS OF THE SALE TO WHICH SUCH AMOUNT RELATES. 5. THE LD CIT(A) HAS ALSO ERRED IN DISALLOWING AN AMOUNT OF RS.89,553/ - RELATING TO EXPENSES INCURRED ON MEETING THE ACCIDENT EXPENSES OF THE EMPLOYEE WHICH WAS ALLOWABLE UNDER SECTION 37(1) AS REVENUE EXPENDITURE BUT WAS INADVERTENTLY RECORDED AS SUNDRY BALA NCE WRITTEN OFF IN SPITE OF THESE FACTS SPECIFICALLY BEING BROUGHT TO THE NOTICE OF THE LD CIT(A). 4. GROUND NO.1 IS GENERAL AND THEREFORE REJECTED. 5. GROUND NO.2 AND 3 IS REGARDING ADDITION OF RS.6,17,289/ - REPRESENTING INCOME FROM ROYALTY FROM M/S. D P LANKA PVT. LTD. 6. FROM A PERUSAL OF THE ORDER, THE PERTINENT FACTS ARE THAT AS PER THE AUDIT REPORT IN FORM 3 CD, FURNISHED BY THE ASSESSEE, IT WAS NOTICED BY THE AO THAT SUM OF RS.6,17,289/ - HAD NOT BEEN RECOGNIZED AS INCOME BY THE ASSESSEE. ON THE BAS IS OF THE SAID AUDIT REPORT, THE AO CAME TO THE CONCLUSION THAT INCOME HAS ACTUALLY ACCRUED TO THE ASSESSEE, BUT HAS NOT BEEN ROUTED THROUGH THE PROFIT AND LOSS ACCOUNT. THEREFORE HE ADDED THE SAID AMOUNT TO THE INCOME OF THE ASSESSEE. BEFORE THE LD CIT(A) , THE ASSESSEE SUBMITTED THAT IT HA D SET UP A WHOLLY OWNED SUBSIDIARY DP BVI IN THE BVI. THE SAID SUBSIDIARY OF ASSESSEE , DP BVI , HAD EXECUTED MFA WITH THE FRANCHISOR ON THE BASIS OF WHICH IT HAD THE EXCLUSIVE RIGHT TO USE THE BRAND AND KNOWHOW AND OTHER R ELATED PAGE 3 OF 11 INTELLECTUAL PROPERTY RIGHTS TO SELL PIZZAS AND RELATED PRODUCTS IN SRI LANKA. DP BVI SUBSEQUENTLY INCORPORATED A WHOLLY OWNED SUBSIDIARY DPLPL (DOMINOS PIZZA LANKA PVT. LTD) TO ESTABLISH, RUN AND OPERATE THE BUSINESS AT SRI LANKA. THE APPELLANT PROVIDED A CORPORATE GUARANTEE OF AN AMOUNT OF SLR 45 MILLION TO DPLPL ON THE BASIS OF WHICH DPLPL OBTAINED LOANS FROM THE BANK TO MEET ITS FUNDING REQUIREMENTS. DPLPL COULD NOT PERFORM UP TO EXPECTATIONS AND HENCE, HAD HUGE LOANS OUTSTANDING FROM THE BANK AND WAS NOT IN A POSITION TO SERVICE/ REPAY SUCH LOANS. THE APPELLANT DECIDED TO EXIT DPLPL AND THUS, WANTED TO GET THE CORPORATE GUARANTEE RELEASED. THE BANK AGREED TO RESTRUCTURE THE LOAN AND OUTSTANDING INTEREST BY WAIVING OFF A PART OF ITS OUTSTANDING PROVIDED AN UPFRONT PAYMENT OF SLR 15 MILLION WAS MADE AND FURTHER ROYALTY ACCRUALS UP TO AN AMOUNT OF SLR 3.5 MILLION IS ASSIGNED IN ITS FAVOUR. ORIGINALLY, AS PER TERMS OF THE AGREEMENT DP BVI AND DPLPL, DPLPL WAS REQUIRED TO P AY NET ROYALTY OF 3% ON ITS SALES. HOWEVER, AS THE RIGHT TO RECEIVE ROYALTY HAD TO BE ASSIGNED TO THE BANK AND DP BVI WAS GETTING DISSOLVED, IT WAS DECIDED TO HAVE THE RIGHT TRANSFERRED TO THE APPELLANT. AS PER THE AGREEMENT WITH THE BANK, THE APPELLANT AS SIGNED THE SAID RIGHTS TO THE BANK. THUS, THE RIGHT TO RECEIVE ROYALTY ACCRUING IN FAVOUR OF THE APPELLANT IN THE FUTURE YEARS CAME WITH AN OBLIGATION TO ASSIGN THOSE RIGHTS IN FAVOUR OF THE BANK AND HENCE, THE APPELLANT NEVER HAD A CLEAN RIGHT TO RECEIVE ROYALTY. 7. IT WAS SUBMITTED THAT IN VIEW OF THE AFORESAID FACTS, THE ROYALTY INCOM E WA S NOT RECOGNIZED IN THE FINANCIAL STATEMENTS. THE LD CIT(A) ON CONSIDERATION FOR REMAND REPORT HAS CONCLUDED AS UNDER: - THE AO IN THE REMAND REPORT HAS SUBMITTED T HAT THE ADDITIONAL DOCUMENTS STRENGTHEN THE CASE OF THE REVENUE. IN THE REMAND REPORT, THE AO HAS OBSERVED AS UNDER: - THE AGREEMENT CLEARLY STATE THAT THE LIABILITY SEYLAN BANK LTD. IS TO BE SERVICE OUT OF THE ROYALTY ACCORD TO DOMINOS INDIA (I.E. THE ASSESSEE). THUS, IT IS CLEAR CASE OF APPLICATION OF INCOME BY THE ASSESSEE. THE CONTENTION OF THE ASSESSEE THAT THE ABOV E ACCRUAL IS NOT LIABLE TO TAX IS BASELESS. HENCE, IT IS REQUESTED THAT THE ADDITIONS MADE IN THE ASSESSMENT ORDER MAY KINDLY BE UPHELD. PERUSAL OF THE COPIES OF AGREEMENT FIELD BY THE APPELLANT SHOW THAT THE APPELLANT WAS REQUIRED TO REMIT ALL ROYALTY ACCRUAL FROM DP LANK LTD. TO SYELAN BANK LTD. TILL THE RE - PAYMENT OF THE LOAN OF RS.3.5 MILLION WAS MADE IN FULL. THE ABOVE SHOWS THAT ROYALTY INCOME HAD ACCRUED TO THE APPELLANT AND IT WAS SUBSEQUENTLY UTILIZED TO MAKE RE - PAYMENT TO SEYLAN BANK LTD AGAINS T THE LOAN TAKEN BY THE APPELLANT. IN VIEW OF THE FACTS DISCUSSED ABOVE THE ROYALTY INCOME SHOULD HAVE BEEN RECOGNIZED BY THE APPELLANT IN ITS ACCOUNTS SINCE THE INCOME HAD ACCRUED TO THE APPELLANT. IN VIEW OF THE FINDINGS ABOVE THE ADDITION MADE BY THE AO ON ACCOUNT OF ROYALTY INCOME IS AS PER LAW. THIS GROUND IS APPEAL IS DISMISS ED. PAGE 4 OF 11 8. THE LD COU NSEL FOR THE ASSESSEE REITERATED THE SUBMISSION BEFORE THE LOWER AUTHORITIES. HE HAS RELIED ON THE CASE OF THE ACIT VS. NESTLE INDIA LTD. 94TTJ 53. HE SUBMITTED THAT THE ROYALTY INCOME HAS CONSISTENTLY BEING NOT TREATED AS INCOME IN EARLIER ASSESSMENT YEARS 2004 - 05 TO 2006 - 07. HE THUS PRAYED THAT THE ADDITION SUSTAINED MAY BE DELETED. ON THE OTHER HAND THE LD DR SUPPORTED THE ORDER FO THE LD CIT(A). 9. WE HAVE HEARD BOTH THE PARTIES AND HAVE PERUSED THE RECORD OF THE CASE. 10. THE UNDISPUTED FACTS ARE THAT THE ASSESSEE EARLIER KNOWN AS DOMINOS PIZZA INDIA PVT (DPIP LTDS, WHOLLY OWNED SUBSIDIARY COMPAN Y (DPBVI) HAD ENTERED INTO A MASTER FRANCHISE AGREEMENT WITH DOMINOS PIZ Z A INTERNATIONAL INC. USA TO DEVELOP PIZAAS STORES UNDER THE BRAND NAME OF DOMINO IN SRI LANKA. THE WHOLLY OWNED SUBSIDIARY OF THE APPELLANT COMPANY DPBVI THEREAFTER ESTABLISHED ANOTHER WHOLLY AND SUBSIDIARY I N SRI LANKA NAMED AND STYLED AS DP LANKA (P) LTD. (DPLPL). M/S. DPLPL RAISED THE LOAN OF 45 MILLION SRI LANKAN RUPEES FROM A BANK AT SRI LANKA. LATER ON DISSOLUTION OF THE SUBSIDIARY COMPANY OF THE APPELLANT COMPANY NAMELY M/S. DPBVI, FRANCHISE RIGHTS WERE ASSIGNED FROM DPBVI TO TH E APPELLANT COMPANY UNDER A TRIPARTITE AGREEMENT. HOWEVER LATER DPLPL RAN INTO LOSSES AS A RESULT THEREOF, SETTLEMENT WAS ARRIVED WITH THE BANK UNDER A LETTER DATED 27.01.2004 (PB. 140, 141) , CONTENTS IN BRIEF IS AS UNDER: - 1. THE BANK SHALL WAIVE OFF SLK 14.78 MILLION OWNED BY DPLPL. 2. DPLPL SHALL BE MAKE AN UPFRONT PAYMENT OF SLR 15 MILLION AS A CASH SETTLEMENT. 3. THE SLR 3.5 MILLION WAS TO BE PAID BY DPLPL THROUGH ASSIGNMENT OF ROYALTY ACCRUALS DUE TO THE ASSESSEE IN FAVOUR OF THE BANK. 4. THE AFOR ESAID DUE OF SLR 3.5 MILLION SHALL BE SECURED BY WAY OF EXECUTION OF LIEN BETWEEN DPLPL AND THE BANK ON FUTURE ROYALTY REMITTANCE DUE TO ASSESSEE TO THE EXTENT OF SLR 3.5 MILLION. 11. FROM THE CONTENTS OF THE AFORESAID LETTER IT IS INTER - ALIA EVIDENT THAT APPELLANT ASSIGNED THE ROYALTY ACCRUALS OF 3..5 MILLION SRI LNAKAN RUPEES TO THE BANK. THIS ASSIGNMENT WAS DONE ON 27.01.2004 I.E. DURING THE FINANCIAL YEAR 2004 - 05 RELEVANT TO ASSESSMENT YEAR 2005 - 06. THERE IS NO DISPU TE TO THE AFORESAID FACTUAL MATRIX THAT SETTLEMENT WAS ARRIVED AT ON ACCOUNT OF THE COR P ORATE GUARANTEE GIVEN BY THE ASSESSEE COMPANY TO THE BANK FOR PROVIDING FINANCIAL ASSISTANCE TO THE WHOLLY OWNED SUBSIDIARY OF THE APPELLANT COMPANY AT SRI LANKA AND SI NCE THE WHOLLY OWNED SUBSIDIARY AT SRI LANKA RAN INTO FINANCIAL PROBLEMS THEREFORE UNDER THE SETTLEMENT ARRIVED WITH THE BANK IT WAS MUTUALLY AGREED THAT REPAYMENT OF LOAN OF 3.5 MILLION SRI LANKA RUPEES OUT OF THE ENTIRE LOAN WAS TO BE PAID THROUGH ASSIGN MENT OF ACCRUALS OF ROYALTY DUE FROM SRI LANKAN COMPANY TO THE APPELLANT COMPANY. IN SUCH CIRCUMSTANCES THE ISSUE FOR PAGE 5 OF 11 CONSIDERATION IS WHETHER THE AFORESAID ASSIGNMENT OF ACCRUAL OF ROYALTY FROM THE SRI LANKAN SUBSIDIARY NAMELY M/S. DPLPL RESULTS INTO NON - TAXABILITY OF THE ROYALTY INCOME IN THE HANDS OF THE ASSESSEE COMPANY. 12. THE HONBLE SUPREME COURT IN THE CASE OF PROVAT KUMAR MITTER. VS. CIT REPORTED IN 41 ITR 624 HELD THAT, FUNDAMENTAL PRINCIPLE IS THAT AN APPLICATION OF INCOME IS AN ALLOCATIO N OF ONES OWN INCOME AFTER IT ACCRUES OR HAS ARISES, ALTHOUGH SUCH APPLICATION MAY BE UNDER A CONTRACT OR OBLIGATION, WHEREAS DIVERSION OF INCOME IS THAT WHICH DIVERTS AWAY OR DEFLECTS BEFORE IT ACCRUES TO OR REACHES THE ASSESSEE AND IT IS RECEIVED BY HIM ONLY FOR THE BENEFIT OF THE PERSON WHO IS ENTITLED TO THE INCOME UNDER AN OVERRIDING CHARGE OR LITTLE. 13 . APPLYING THE ABOVE TEST AS ENUNCIATED BY THE APEX COURT WE ARE OF THE OPINION THAT THERE IS ACCRUAL OF INCOME TO THE APPELLANT. THE ASSIGNMENT OF THE INCOME BY THE APPELLANT CANNOT WAIVE THE LIABILITY UNDER THE ACT. THE ACCRUAL OF THE ROYALTY WOULD TAKE PLACE AS SOON AS PIZZA IS SOLD BY M/S. DPLPL IN SRI LANKA. THE ACCRUAL OF ROYALTY IS NOT DEPENDENT UPON THE REPAYMENT OF LOAN BY THE SRI LANKAN COMPANY T O T H E CEYLON BANK. THE ASSESSEES LIABILITY TO PAY TO THE SRI LANKAN / C E Y L O N BANK ARISES BECAUSE THE ASSESSEE STOOD AS A CORPORATE GUARANTOR FOR THE LOAN FROM THE SRI LANKAN / C E Y L O N BANK TO THE SRI LANKAN ENTITY. THE UTILIZATION OF THE ROYALTY MONEY BY THE SRI LANKA N ENTITY TO THE CEYLON BANK WILL NOT AFFECT THE ACCRUAL OF ROYALTY TO THE ASSESSEE. THE SUBSEQUENT PAYMENT THEREOF OF SRI LANKAN BANK IS ONLY THE APPLICATION OF THAT ACCRUED ROYALTY FOR AND ON BEHALF OF THE ASSESSEE. 1 4 . I N S U C H C I R C U M S T A N C E S T H E A D D I T I O N M A D E O F R S . 6 , 1 7 , 2 8 9 / - I S U P H E L D A N D T H E S A I D G R O U N D O F T H E ASSESSEE I S R E J E C T E D . 1 5 . GROUND NO.4 AND 5 IS IN RESPECT OF DISALLOWANCE OF RS.2,79,564/ - , REPRESENTING SUNDRY BALANCE WRITTEN OFF BY THE ASSESSEE. THE AO AND THE LD CIT(A) HAVE DISALLOWED THE CLAIM OF THE GROUND THAT THE SAME IS NOT SUPPORTED BY ANY EVIDENCE REGARDING THE BONAFIDE OF THE WRITE OFF BY THE ASSESS EE. IT HAS BEEN HELD BY THE LD CIT(A) THAT THE APPELLANT HAS NOT FILED EVEN THE DETAILS OF THE SALES WHICH HAD BEEN WRITTEN OFF AS BAD DEBTS NOR ANY EVIDENCES TO SHOW THAT IT HAD BEEN RECOGNIZED AS REVENUE INCOME IN THE EARLIER YEARS. 1 6 . WE HAVE HEARD B OTH THE PARTIES AND HAVE PERUSED THE RECORD OF THE CASE. WE FIND THAT THE ISSUE HAS ALREADY BEEN CONSIDERED BY THE CO - ORDINATE BENCH IN THE ASSESSEE S OWN CASE FOR ASSESSMENT YEAR 2003 - 04 TO 2005 - 06. IN THE SAID ORDER THE CO - ORDINATE BENCH UPHELD THE REASONING AND FINDING OF THE LD CIT(A) WHO HAD DELETED AN IDENTICAL ADDITION BY OBSERVING AS UNDER: - PAGE 6 OF 11 15. AS REGARDS NEXT ISSUE IN RELATION TO DELETION OF RS.8,44,472/ - BY THE ASSESSING OFFICER ON ACCOUNT OF SUNDRY BALANCE WRITTEN OFF IS CONCERNED, A.O. MA DE THE DISALLOWANCE AND BEFORE CIT(A), ASSESSEE SUBMITTED THAT BUSINESS OF THE ASSESSEE IS THAT OF DOMINO'S PIZZA AND THEIR SALE FROM RETAIL OUTLET IS THROUGHOUT INDIA. THE SALES ARE AFFECTED BOTH AT THE RETAIL OUTLETS AS WELL AS THROUGH HOME DELIVERY TO T HE CUSTOMERS. MOST OF THE SALES OF THE ASSESSEE ARE AFFECTED THROUGH HOME DELIVERY. THE SALES OF THE PIZZAS IS PRIMARILY ON CASH BASIS, HOWEVER, SOME OF THE SALE TO THE CORPORATES MAY BE ON CREDIT BASIS. WHILE CARRYING OUT DAY - TO - DAY TRANSACTIONS BOTH AT R ETAIL OUTLETS AND THROUGH HOME DELIVERY TO THE CUSTOMERS THERE ARE SOME INSTANCES WHERE THE TOTAL SALE REVENUE COULD NOT BE REALISED BY THE ASSESSEE ON ACCOUNT OF A VARIETY OF REASONS. DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE HAD ALREADY ESTABLISH ED 81 STORES AND THE TOTAL INVOICES RAISED BY THE ASSESSEE WERE IN EXCESS OF 2.5 MILLION. AS A RESULT OF THIS, CERTAIN AMOUNTS HAD TO BE WRITTEN OFF BY THE ASSESSEE IN ITS BOOKS OF ACCOUNTS. WHILE CARRYING OUT DAY - TO - DAY TRANSACTIONS, THERE ARE SOME INSTAN CES WHERE THE AMOUNT FOR THE SALE OF PIZZA IS NOT RECOVERED FROM THE CUSTOMER, SUCH AS CUSTOMER PAID SHORT, SOILED NOTES ARE RECEIVED AND AT TIMES NOT ACCEPTED BY THE BANK, PIZZA DELIVERED ON TIME STILL CUSTOMER INSISTS THAT IT IS LATE AND DOES NOT PAY AT ALL, NON APPROVAL BY THE BANK OF THE PAYMENT MADE THROUGH CREDIT CARD, DELIVERY PERSONNEL MAY BE ABSCONDING WITH CASH HE HAS COLLECTED FOR THE DELIVERY SALES HE HAS MADE DURING THE DAY OR WITH THE AMOUNT OF IMPREST PAID TO HIM, IN CASE OF CREDIT SALES TO C ORPORATE CUSTOMERS, SOMETIMES THE AMOUNT PAID IS LESS THAN THE ACTUAL AMOUNT AS PER INVOICE. THEREFORE, IT WAS PLEADED FOR DELETION OF THE IMPUGNED ADDITION AND RELIANCE WAS PLACED IN THE CASE OF CIT VS. GLOBAL CAPITAL LTD., 306 ITR 332, CIT VS. AUTOMATION LTD., 292 ITR 345 (DEL. AND CIT VS. MORTGAN SECURITIES & CREDITS P. LTD., 292 ITR 339 (DEL.). CIT(A) WHILE CONSIDERING AND ACCEPTING THE PLEA OF THE ASSESSEE HAS CONCLUDED TO DELETE THE IMPUGNED ADDITION AS PER PARA.6.1 OF HIS ORDER WHICH READS AS UNDER: '6.1 I HAVE CAREFULLY GONE THROUGH THE ORDER OF THE ASSESSING OFFICER AND THE DETAILED SUBMISSIONS MADE BY THE APPELLANT. I HAVE ALSO GONE THROUGH THE BUSINESS MODEL OF THE APPELLANT AND THE NATURE OF ACTIVITIES PERFORMED BY IT. EXAMINING THE VARIOUS INST ANCES LEADING TO SUCH WRITING OFF OF BALANCES AND BAD DEBTS AS SUBMITTED BY. THE APPELLANT AND TAKING INTO ACCOUNT THE NATURE OF BUSINESS CARRIED ON BY THE APPELLANT, I AM OF THE VIEW THAT SUCH LOSSES ARE INEVITABLE IN THE LINE OF BUSINESS CARRIED ON BY TH E APPELLANT, THROUGH A NUMBER OF OUTLETS ANDS CONSIDERING THE VOLUME OF TRANSACTIONS. RELIANCE IS ALSO PLACED ON THE DECISIONS CITED BY THE APPELLANT WHICH CLEARLY LAY DOWN THE PROPOSITION THAT THE DECISION TO TREAT A DEBT AS BAD DEBT IS A COMMERCIAL OR BU SINESS DECISION AND ONCE THE ASSESSEE RECORD THE DEBT AS BAD IN HIS BOOKS OF ACCOUNT, THE SAME IS AN ALLOWABLE EXPENDITURE. THE WRITING OFF HAS NO DOUBT TO BE BONA FIDE. THE BONA FIDE OF THE APPELLANT IS PRIME FACIE EVIDENT IN THE FACTS OF THE CASE. FURTHE R, IT IS NOT POSSIBLE FOR THE APPELLANT TO KEEP DETAILS OF EACH AND EVERY CUSTOMERS. IN VIEW OF THE ABOVE DISCUSSIONS, THE DISALLOWANCE OF RS.8,44,462/ - MADE BY ASSESSING OFFICER ON THIS ACCOUNT IS DELETED.' 16. .. 17. .... 18. WE HAVE HEARD BOTH THE SIDES, CONSIDERED THE MATERIAL ON RECORD AND FIND THAT SUNDRY BALANCES WRITTEN OFF ARE RELATABLE TO BUSINESS NEED AND CIT(A) WHILE CONSIDERING THE ENTIRETY OF FACTS, CIRCUMSTANCES AND MATERI AL ON RECORD HAS JUSTIFIABLY ALLOWED THE RELIEF TO THE ASSESSEE. SINCE, NO CONTRARY MATERIAL OR PAGE 7 OF 11 EVIDENCE HAS BEEN FURNISHED NOR ANY INFIRMITY OR FLAW HAS BEEN POINTED OUT OR NOTICED, THEREFORE, WHILE CONCURRING WITH THE CONCLUSION, WE UPHOLD THE DECISION O F CIT(A) IN THIS REGARD BY CONFIRMING HIS ACTION AND DISMISS THIS GROUND OF APPEAL OF THE REVENUE. 1 7 . LIKEWISE EVEN IN ASSESSMENT YEAR 2006 - 07 AN IDENTICAL DISALLOWANCE WAS MADE BY THE LD AO, WHICH WAS DELETED BY THE LD CIT(A). HOWEVER IT HAS BEEN STAT ED BEFORE US THAT NO APPEAL WAS FILED BY THE REVENUE AGAINST THE SAID DELETION. HAVING REGARD THE ABOVE FACTUAL POSITION, WE RESPECTFULLY FOLLOW THE ORDER OF THE CO - ORDINATE BENCH AND ALLOW THE CLAIM OF THE ASSESSEE. 1 8 . IN THE RESULT THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. 1 9 . IN ITA NO.4681/DEL/2014 THE REVENUE HAS RAISED FOLLOWING TWO GROUNDS: - 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS .7,12,40,589/ - MADE BY THE AO ON ACCOUNT OF FRANCHISEE FEE AMOUNTING TO RS.7,12,40,589/ - TREATING IT AS A RECURRING REVENUE EXPENDITURE AND NOT AS A CAPITAL EXPENDITURE. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT(A) HAS ER RED IN DELETING THE COMPUTER PERIPHERALS BE ALLOWED DEPRECIATION AT THE RATE OF 60% EQUIVALENT TO COMPUTERS RELYING UPON DIFFERENT CASE LAWS NOT APPRECIATING THAT DEPARTMENTS SLP IS PENDING IN THE SUPREME COURT ON THIS ISSUE IN THE CASE OF CIT(A) VS. BSES YAMUNA POWER LTD. 2 0 . THE GROUND NO. 1 IS DISALLOWANCE OF FRANCHISEE FEE OF RS.7,12,40,589/ - BY HOLDING IT AS CAPITAL EXPENDITURE. 2 1 . BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE COMPANY WAS CARRYING ON BUSINESS OF MANUFACTURING AND SALE OF PIZZA FROM ITS RETAIL OUTLET. IT HAD FILED ITS RETURN OF INCOME ON 30.07.2008 WHICH WAS SUBSEQUENTLY REVISED DECLARING NET TAXABLE INCOME OF RS.7,78 ,93,487/ - WHICH HAD BEEN ADJUSTED AGAINST BROUGHT FORWARD LOSS OF EARLIER YEARS CLAIMED BY THE ASSESSEE RESULTING IN NIL TAXABLE INCOME. THE ASSESSING OFFICER NOTICED THAT IN SCHEDULE 12 TO THE P& L A/C THE ASSESSEE COMPANY HAD CLAIMED DEDUCTION OF RS.7,12 ,40,589/ - UNDER THE HEAD ADVERTISEMENT & PUBLICITY EXPENSES WHICH WAS EXPLAINED LATER BY THE ASSESSEE AS EXPENDITURE INCURRED O N ACCOUNT OF FRANCHISE FEES PAID . THE ASSESSING OFFICER REQUIRED THE ASSESSEE TO EXPLAIN AS TO HOW SUCH HUGE PAYMENT MADE TO M/ S DOMINO'S PIZZA INTERNATIONAL, INC., USA WAS JUSTIFIED AND WHY THE SAME SHOULD NOT BE DISALLOWED, BEING IN THE NATURE OF CAPITAL EXPENDITURE. THE ASSESSEE CONTENDED BEFORE THE AO THAT IT RECEIVED ONLY A LICENSE TO USE/ RIGHT TO USE DOMINOS SYSTEMS & THE MARK, NAME AND LOGO WAS GRANTED, AND NO TRADE MARK, LOGO OR PROCESS WAS TRANSFERRED TO THE ASSESSEE. THE AMOUNT THAT WAS PAID BY THE ASSESSEE ONLY ENABLED THE ASSESSEE TO FACILITATE THE MANUFACTURING PROCESS BUT IT DID NOT ACQUIRE THE PAGE 8 OF 11 PROPRIETARY RIGHT IN SUCH MARK OR LOGO. FURTHER, THE ASSESSEE ACQUIRED THE RIGHT TO USE THESE MARK, NAME AND LOGO ONLY TILL THE AGREEMENT WAS INFORCE AND NOT THEREAFTER. 2 2 . IN VIEW OF THE AFORE SAID FACTS AND AS PER THE TERMS OF THE AGREEMENT IT WAS CONTENDED BY THE ASSESSEE BEFORE THE AO THAT IT DID NOT DERIVE ANY BENEFIT OF ENDURING NATURE , SO ACCORDING TO THE ASSESSEE THE EXPENSES ARE REVENUE IN NATURE. DISSATISFIED BY THE EXPLANATION OF THE ASSESSEE THE AO HELD THAT 25% OF TECHNICAL FEE HAD TO BE TAKEN AS CAPITAL EXPENDITURE AND AS SUCH COULD NOT BE ALLOWED AS REVENUE EXPENDITURE. HE, ACCORDINGLY, DISALLOWED RS.7,12,40,589/ - TREATING THE SAME AS CAPITAL IN NATURE. 2 3 . BEFORE LD. CIT(A) IT WAS SUBMITTED THAT THE ASSESSEE HAD ENTERED INTO AN AGREEMENT WITH THE FRANCH ISOR ON 27 - 3 - 1995 FOR DEVELOPMENT OF DOMINO'S PIZZA STORES IN INDIA (HEREINAFTER REFERRED TO AS THE 'AGREEMENT'). IN TERMS OF THE AGREEMENT, THE ASSESSEE HAD THE RIGHT TO USE THE TRADEMARK, DOMINO'S NAME AND LOGO AND EXCLUSIVE LICENSE TO DEVELOP AND OPERAT E A COMMISSARY AND TO PREPARE, PROCESS, PRODUCE AND DISTRIBUTE THE PRODUCTS THROUGHOUT THE EXCLUSIVE TERRITORY FOR WHICH A RECURRING PAYMENT ON THE BASIS OF SALES WAS TO BE MADE. IT WAS FURTHER CLARIFIED THAT FRANCHISOR HAD IN NO WAY TRANSFERRED ANY ABSOLU TE RIGHT IN MARKS, DOMINO'S NAME AND LOGO TO THE ASSESSEE FOR EXCLUSIVE USE WITHIN THE TERRITORY. THE AGREEMENT WAS EXECUTED FOR 15 YEARS AND COULD BE RENEWED FOR A SUBSEQUENT PERIOD OF 0 YEARS. THE ASSESSEE WAS REQUIRED TO MAKE TWO TYPES OF PAYMENTS TO FR ANCHISOR AS PER CLAUSE 4 OF THE AGREEMENT - (I) TECHNICAL AND CONSULTANCY FEES - ONE TIME LUMP SUM OF US$ 200000 FOR GRANTING EXCLUSIVE LICENSE TO USE THE DOMINO'S NAME, MARK, SYSTEM AND LOGO, RELATED KNOW HOW AND TECHNICAL 4 KNOWLEDGE. THIS AMOUNT WAS ALREADY CAPITALIZED IN THE BOOKS OF A/C OF THE ASSESSEE. (II) FRANCHISEE/ MARKETING FEE FOR CONTINUING USE OF DOMINO'S NAME, LOGO ETC. WAS PAYABLE @ 3% ON ASSESSEE'S STORE AND 3% ON SUB - FRANCHISE STORE ON THE BASIS OF QUANTUM OF MONTHLY SALES. THE FRANCHI SOR HAD THE RIGHT TO INSPECT THE PIZZAS AND OTHER FOODS PRODUCTS PREPARED BY THE ASSESSEE DURING THE TENURE OF THE AGREEMENT. THE FRANCHISOR HAD TO PROVIDE THE REQUISITE ADVERTISEMENT MATERIAL THAT IT HAD DEVELOPED IN THE US AND REQUIRED THE ASSESSEE TO AD HERE TO THE GLOBAL STANDARDS AND OPERATING PROCEDURES ADOPTED BY THE FRANCHISOR DURING THE TENURE OF THE AGREEMENT. PAGE 9 OF 11 2 4 . LD. CIT(A) AFTER CONSIDERING THE ENTIRE AGREEMENT IN DETAIL ALLOWED THE ASSESSEE'S CLAIM, AND HELD AS UNDER THE FOLLOWING THE ORDER OF HIS PREDECESSOR FOR ASSESSMENT YEAR 2003 - 04 AND 2005 - 06. '1 HAVE CAREFULLY GONE THROUGH THE ASSESSMENT ORDER THE AO AND THE SUBMISSION MADE BY THE APPELLANT. I HAVE ALSO GONE THROUGH THE AGREEMENT DATED 27.03.19 95 ENTERED BETWEEN THE APPELLANT AND M/S. DOMINOS INTERNATIONAL INC. ON GOING THROUGH VARIOUS CLAUSES OF THE AGREEMENT ENTERED INTO BY THE APPELLANT, IT IS FOUND THE APPELLANT HAS THE RIGHT TO USE THE TRADE MARKS, DOMINO'S NAME AND LOGO AND EXCLUSIVE LICE NSE TO DEVELOP AND OPERATE A COMMISSARY AND TO PREPARE, PROCESS, PRODUCE AND DISTRIBUTE THE PRODUCTS THROUGHOUT THE EXCLUSIVE TERRITORY FOR WHICH A RECURRING PAYMENT, DEPENDENT UPON THE QUANTUM OF SALES, WAS TO BE PAID. AS PER CLAUSE 4 OF THE AGREEMENT THE APPELLANT IS REQUIRED MAKE TWO TYPES OF PAYMENT TO THE FRANCHISOR, (I) TECHNICAL AND CONSULTANCY FEE OF US$ 20,00 WHICH IS AN ONE TIME LUMP SUM PAYMENT AND (IT) FRANCHISEE/MARKETING FEE @3% ON APPELLANT S STORE AND 3% ON SUB - FRANCHISEE SORE ON THE BASIS O F QUANTUM OF MONTHLY SALES. THE APPELLANTS ACCORDINGLY CAPITALIZED THE TECHNICAL AND CONSULTANCY FEE AND IS CLAIMING THE FRANCHISEE FEE S REVENUE EXPENDITURE. IT IS CLEAR FROM THE TERMS OF THE AGREEMENT THAT THE FRANCHISEE TO BE PAID BY THE APPELLANT IS BASED ON THE SALES AND IS RECURRING IN NATURE. THE APPELLANT WAS ALSO ASKED TO SUBMIT THE DETAILED WORKINGS OF THE FRANCHISEE FEE AND WAS ALSO ASKED TO RECONCILE WITH THE TURNOVER OF THE APPELLANT. AS PER THE WORKING SUBMITTED BY THE APPELLANT THE FRANCHIS EE FEE WAS FOUND TO BE PAID AS PER THE TERMS OF THE AGREEMENT I.E. 3% OF THE SALES. IN THE CASE OFCITVS. SHARD A MOTOR INDUSTRIAL LTD [319 ITR 109 (DEL)}, AS PER THE TERMS OF AGREEMENT, THE ASSESSEE PAID A LUMP SUM AMOUNT FOR THE TRANSFER OF TECHNICAL KNO W - HOW WHICH WAS CAPITALIZED BY THE ASSESSEE WHEREAS THE ROYALTY WHICH WAS DEPENDED UPON THE NUMBER OF PIECES OF THE PRODUCT THAT WERE PRODUCED BY THE ASSESSEE WAS CLAIMED BY THE ASSESSEE AS REVENUE EXPENDITURE. IN THE INSTANT CASE THE HON 'BLE JURISDICTIONA L DELHI HIGH COURT HELD THAT THE ROYALTY EXPENDITURE IS A REVENUE EXPENDITURE. THE FACTS OF THE APPELLANT ARE SIMILAR TO THE FACTS IN THE ABOVE CASE IN AS MUCH AS THE FRANCHISEE FEES IS RECURRING PAYMENT WHICH IS DIRECTLY RELATED TO THE FIGURES OF SALES MA DE BY THE APPELLANT AND IS THEREFORE A PAYMENT LINKED TO THE RUNNING OF BUSINESS AND WITH A VIEW TO PRODUCE PROFITS. ACCORDINGLY THIS FEES IS REVENUE EXPENDITURE INNATURE. IN VIEW OF THE ABOVE DISCUSSIONS AND RELYING ON THE DECISIONS OF THE JURISDICTIONAL HON'BLE DELHI HIGH COURT IN CFT VS. J.K. SYNTHETICS (SUPRA); CFT VS. SHARDA MOTOR INDUSTRIAL LTD. (SUPRA) & CLIMATE SYSTEM INDIA LTD. (SUPRA), THIS GROUND OF APPEAL IS ALLOWED AND THE ADDITION MADE BY THE AO ON THIS GROUNDFOR RS. 38791151 - IS DIRECTED TO BE DELETED' IN THE INSTANT YEAR ALSO IT IS SEEN THAT THE FRANCHISEE FEE IS A RECURRING PAYMENT WHICH IS DIRE CTLY RELATED TO THE FIGURES OF SALES MADE BY THE APPELLANT AND IS THEREFORE A PAYMENT LINKED TO THE RUNNING OF THE BUSINESS WITH A VIEW TO PRODUCE PROFITS. THE FACTS AND CIRCUMSTANCES REMAINING THE SAME I HAVE NO REASON TO DIFFER WITH THE FINDINGS OF MY PR EDECESSOR IN A Y 2003 - 04 AND 2005 - 06. RESPECTFULLY FOLLOWING THE SAME AND ALSO RELYING ON THE DECISIONS OF THE HON'BLE DELHI HIGH COURT IN THE CASE OFCIT VS. 1.K. SYNTHETICS, CIT VS. SHARDA MOTOR INDUSTRIAL LTD. AND CLIMATE SYSTEM INDIA LTD., THESE GROUNDS OF APPEAL ARE ALLOWED IN FAVOUR OF THE APPELLANT AND THE DISALLOWANCE MADE BY THE AO IS DELETED. 2 5 . THE ORDER OF THE LD CIT(A) FOR ASSESSMENT YEAR 2003 - 04 TO 2005 - 06 IN ASSESSEES OWN CASE HAS BEEN UPHELD BY THE TRIBUNAL BY HOLDING ASUNDER: - 'WE HAVE HEARD BOTH THE SIDES, CONSIDERED THE MATERIAL ON RECORD AS WELL AS RELEVANT PROVISIONS OF LAW AND FIND THAT CIT(A) HAS CONSIDERED EACH AND EVERY ASPECT OF THE MATTER BEFORE ARRIVING AT THE CONCLUSION AS DRAWN BY HIM. HE HAS ELABORATELY DISCUSSED EACH AND E VERY ISSUE IN AN APPROPRIATE MANNER SPECIFYING ALL THE RELEVANT DETAILS. NEITHER ANY CONTRARY MATERIAL HAD BEEN PLACED ON RECORD BY THE DEPARTMENT NOR NOTICED BY THIS PAGE 10 OF 11 BENCH WHICH COULD CONVINCE US TO TAKE A DIFFERENT VIEW THAN TAKEN BY LD. CIT(A). AS SUCH, WHILE CONCURRING WITH THE FINDING AND CONCLUSION AS DRAWN BY LD. CIT(A) ON THE FIRST LIMB OF THIS ISSUE, WE UPHOLD HIS ORDER AND DISMISS THE APPEAL OF THE REVENUE FOR THE FIRST LIMB OF THE ISSUE INVOLVED.' 2 6 . IT HAS BEEN BROUGHT TO OUR NOTICE THAT THE, APPEAL PREFERRED BY THE REVENUE AGAINST THE ORDER OF THE TRIBUNAL FOR ASSESSMENT YEAR 2003 - 04 HAS BEEN UPHELD BY THE HONBLE JURISDICTIONAL HIGH COURT BY HOLDING AS UNDER: - 3. SIMILAR VIEW WAS ALSO EXPRESSED BY THE DELHI HIGH COURT IN COMMISSIONER OF INCOME TAX VERSUS SALORA INTERNATIONAL LIMITED, (2009) 308 ITR 199 (DELHI). THE COMMISSIONER OF INCOME TAX (APPEALS) AND THE TRIBUNAL HAS RIGHTLY COME TO THE CONCLUSION THAT; I) NO NEW ASSET CAME INTO EXISTENCE ON A CCOUNT OF PAYMENT OF FRANCHISE FEE AND II) THE RIGHTS UNDER THE AGREEMENT WERE ONLY FOR THE TENURE OF THE AGREEMENT AND NO ENDURING BENEFIT WAS DERIVED BY THE ASSESSEE. FURTHER, IT WAS NOT AN EXPENDITURE INCURRED FOR ACQUISITION OF SOURCE OF PROFIT, BUT EN ABLED THE RESPONDENT - ASSESSEE TO RUN THE BUSINESS PROFITABLY. THE FIXED ASSETS OF THE ASSESSEE REMAINED UNTOUCHED AND NO ENDURING ASSET CAME INTO EXISTENCE. AS ALREADY NOTED ABOVE, THE BRAND OR THE TRADEMARK IN QUESTION WAS NOT OWNED BY THE RESPONDENT - ASSE SSEE. 4. WE HAVE ALSO EXAMINED THE ORDER PASSED BY THE ASSESSING OFFICE. OTHER THAN RELYING UPON THE DECISION OF THE MADRAS HIGH COURT IN THE CASE OF SOUTHERN SWITCHGEAR LIMITED (SUPRA), THERE IS NO DISCUSSION RELATING TO THE FACTUAL MATRIX TO JUSTIFY HIS CONCLUSION THAT 25% OF THE FRANCHISE FEE SHOULD BE TREATED AS CAPITAL EXPENDITURE. NO FACTS WERE HIGHLIGHTED AND STATED TO JUSTIFY THE CONCLUSION. IN VIEW OF THE AFORESAID REASONING, WE ARE NOT INCLINED TO ISSUE NOTICE ON THE FIRST QUESTION/ ISSUE RAISED BY THE APPELLANT - REVENUE. 2 7 . IN THE LIGHT OF THE ABOVE RESPECTFULLY FOLLOWING THE VIEW TAKEN IN EARLIER YEARS, WE UPHOLD THE FINDING OF LD. CIT(A) WHO HAS RELIED ON VARIOUS DECISIONS OF HON'BLE DELHI HIGH COURT AND FURTHER IT IS NOT DISPUTED BEFORE US THAT THE ASSESSEE HAD ACQUIRED RIGHT ONLY TO USE/ONLY ACCESS TO THE TECHNICAL INFORMATION AND THERE WAS N EITHER TRANSFER OF OWNERSHIP WITH RESPECT TO THE PROCESS AND THE KNOW - HOW NOR OF THE BRAND OR THE TRADE MARK IN QUESTION UNDER THE AGREEMENT IN FAVOUR OF THE ASSESSEE. THEREFORE, THIS PAYMENT IS IN THE NATURE AND CHARACTER OF REVENUE EXPENDITURE AND NOT CAPITAL. IN THE RESULT THIS GROUND OF REVENUE IS DISMISSED. 28 . GROUND NO.2 IS REGARDING DELETION OF DEPRECIATION AT THE RATE OF 60% ON COMPUTER PERIPHE RALS. THE LD CIT(A) HAS DELETED THE ADDITION FOLLOWING THE ORDERS OF THE HONBLE HIGH COURT IN BSES YAMUNA POWER LTD. THE ONLY CONTENTION OF THE REVENUE IS THAT IT HAS PREFERRED ON SLP AGAINST THE SAID ORDER OF THE HONBLE HIGH COURT SO, THE IMPUGNED ORDE R OF LD CIT(A) MAY BE SET ASIDE AND THE ORDER OF THE AO BE RESTORED. WE FIND THAT THE LD DR COULD NOT BRING TO OUR NOTICE ANY INTERIM ORDER OF STAY BY THE HONBLE SUPREME COURT IN RESPECT TO THE OPERATION OF THE SAID ORDER OF THE HONBLE HIGH COURT PAGE 11 OF 11 RELIED BY THE LD CIT(A) GRANTING RELIEF TO THE ASSESSEE. IN THE ABSENCE OF THE SAME, WE ARE BOUND BY THE BINDING PRECEDENT LAID DOWN BY THE HONBLE JURISDICTIONAL HIGH COURT. THEREFORE, THE LD CIT(A) HAS RIGHTLY RELIED UPON THE ORDER OF THE HONBLE HIGH COURT IN BSES YAMUNA POWER LTD AND WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD CIT(A) AND THEREFORE, WE DISMISS THE GROUND OF THE REVENUE. 29 . IN THE RESULT THE APPEAL OF THE REVENUE IS DISMISSED. 30 . ITA NO.5921/DEL/2012, THE ASSESSEE HAS RAISED ONLY ONE EFFECTIVE GROUND OF APPEAL WHICH IS AS UNDER: - 2. THE LD CIT(A), AS WELL AS LEARNED ASSESSING OFFICER REFERRED AS AO) HAVE ERRED IN LAW AND ON THE FACTS AND CIRCUMSTANCES OF THE CASE BY HOLDING THAT ROYALTY AMOUNT OF RS.565,873/ - FROM DP LANKA PVT HAD ACTUALLY ACCRUED TO THE APPELLANT DURING THE RELEVANT PERIOD. 31 . THIS GROUND OF THE ASSESSEE HAS BEEN RAISED BY IT IN APPEAL IN I TA NO. 4626 /DEL/2012 (SUPRA) AS GROUND NO.2, WHICH HAS BEEN ADJUDICATED AND DISMISSED . SINCE FACTS AND CIRCUMSTANCES OF TH E SAID GROUND OF APPEAL IS IDENTICAL, AND NO CHANGE IN FACTS HAS BEEN BROUGHT TO OUR NOTICE BY THE ASSESSEE , WE REJECT THE SAID GROUND FOR THE REASONS STATED THEREIN AND CONFIRM THE IMPUGNED ORDER. 32 . IN THE RESULT THE APPEAL OF THE ASSESSEE IS DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT ON 1 7 . 10 . 2014. - S D / - - S D / - ( G. D. AGARWAL) (A. T. VARKEY) VICE PRESIDENT JUDICIAL MEMBER DATED : 1 7 / 10 / 2014 A K KEOT COPY FORWARDED TO 1. APPLICANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI