Income Tax Officer-2(1), Kanpur V. Shri Arvind Kumar Tusele, Kanpur

ITA 484/LKW/2014

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 0553 (ITAT-LUCKNOW)
• Duration Of Justice: 10 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-04-2015
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 01-04-2015
• Assessment Year: 2004-2005
• Appeal Filed On: 28-05-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Royalty expenses; Capital expenditure

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B, LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER ITA NO.484/LKW/2014 ASSESSMENT YEAR:2004 - 05 SHRI ARVIND KUMAR TUSELE, PROP. M/S KURELE CHEMICALS COMPANY G - 22, PANKI INDUSTRIAL AREA - 1, KANPUR. PAN:ABQPT9607F VS INCOME TAX OFFICER - 2(1), KANPUR. (RESPONDENT) (APPELLANT) SHRI Y. P. SRIVASTAVA, D. R. APPELLANT BY NONE RESPONDENT BY 01/04/2015 DATE OF HEARING 21 /04/2015 DATE OF PRONOUNCEMENT O R D E R PER A. K. GARODIA, A.M. THIS IS REVENUES APPEAL DIRECTED AGAINST THE ORDER PASSED BY LEARNED CIT(A) - II, KANPUR DATED 25/02/2014 FOR THE ASSESSMENT YEAR 2004 - 2005. 2. THE GROUNDS RAISED BY THE REVENUE ARE AS UNDER: 1. THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS) - II, KANPUR HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.16,08,716/ - , MADE BY THE ASSESSING OFFICER ON ACCOUNT OF DISALLOWANCE OF ROYALTY EXPENSES WITHOUT APPRECIATING THE FACTS BROUGHT ON RECORD BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER. 2. THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS) - II, KANPUR HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.16,08,716/ - , MADE BY THE ASSESSING OFFICER, ON ACCOUNT OF DISALLOWANCE OF ROYALTY WITHOUT GIVING ANY DECISION ON THE FINDING REACHED B Y THE 2 ASSESSING OFFICER IN THE ASSESSMENT ORDER WITHOUT APPRECIATING THE FACT THAT THE TRANSFER OF RIGHT OF TRADEMARK WAS MADE BY THE ASSESSEE WITH A VIEW TO EVADE TAX LIABILITY THROUGH COLORABLE DEVICE. 3. THAT THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS) - II, KANPUR DATED 25.02.2014, BEING ERRONEOUS IN LAW AND ON FACTS, BE QUASHED AND THE ORDER DATED 12.10.2007 PASSED BY THE ASSESSING OFFICER BE RESTORED. 3. NONE APPEARED ON BEHALF OF THE ASSESSEE ON THE APPOINTED DATE OF HEARING IN SPITE OF N OTICE AND HENCE, WE PROCEED TO DECIDE THIS APPEAL OF THE REVENUE EX - PARTE QUA THE ASSESSEE. 4. LEARNED D.R. OF THE REVENUE SUPPORTED THE ASSESSMENT ORDER. 5. WE HAVE CONSIDERED THE SUBMISSIONS OF LEARNED D.R. OF THE REVENUE, PERUSED THE MATERIAL AVAILABL E ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE FIND THAT DISALLOWANCE OF ROYALTY WAS MADE BY THE ASSESSING OFFICER ON THE BASIS THAT THIS IS CAPITAL EXPENDITURE AND THIS DISALLOWANCE WAS MADE ON THE BASIS OF DISALLOWANCE MADE IN EAR LIER YEAR. THE CIT(A) HAS OBSERVED THAT THE ROYALTY EXPENSES PAID OF RS. 20,29,753/ - IN ASSESSMENT YEAR 2005 - 06 HAS BEEN ALLOWED BY CIT(A) - II, KANPUR VIDE ORDER DATED 20/09/2010 AND BY DELHI BENCH OF THE TRIBUNAL IN I.T.A. NO.834/DEL/11 DATED 21/04/2011 PA SSED IN THE CASE OF THE ASSESSEE. IT IS ALSO NOTED BY CIT(A) THAT THE ASSESSING OFFICER HAS MADE DISALLOWANCE ON THE BASIS THAT IT IS CAPITAL EXPENDITURE AND THIS GROUND OF CAPITAL EXPENDITURE HAS BEEN CONSIDERED BY DELHI BENCH OF THE TRIBUNAL IN THE CASE OF THE ASSESSEE FOR ASSESSMENT YEAR 2005 - 06 AND HAS NEGATED SUCH GROUND. HENCE, IT IS SEEN THAT THE DECISION OF CIT(A) IS ON THE BASIS OF A TRIBUNAL ORDER OF DELHI BENCH FOR ASSESSMENT YEAR 2005 - 06 BUT WE FAIL TO UNDERSTAND THAT HOW DELHI BENCH OF THE TR IBUNAL CAN PASS AN ORDER IN THE CASE OF THE 3 ASSESSEE SITUATED IN KANPUR AND PRESENT YEARS APPEAL IS FILED AT LUCKNOW. NONE WAS PRESENT ON BEHALF OF ASSESSEE TO PROVIDE COPY OF THIS TRIBUNAL ORDER FOR ASSESSMENT YEAR 2005 - 06, WHICH HAS BEEN FOLLOWED BY CI T(A). HENCE, IT APPEARS THAT THE TRIBUNAL ORDER IN SOME OTHER CASE OF DELHI BENCH HAS BEEN FOLLOWED BY CIT(A) BY TREATING IT TO BE THE TRIBUNAL ORDER IN ASSESSEES OWN CASE. WE, THEREFORE, FEEL THAT THE DECISION OF CIT(A) ON THIS BASIS IS NOT SUSTAINABLE AND WE FEEL IT PROPER TO RESTORE THE MATTER BACK TO THE FILE OF CIT(A) FOR FRESH DECISION AFTER OBTAINING THE TRIBUNAL ORDER IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2005 - 06. WE, THEREFORE, SET ASIDE THE ORDER OF CIT(A) AND RESTORE THE MATTER BACK TO H IS FILE FOR FRESH DECISION. THE CIT(A) SHOULD PASS NECESSARY ORDER AS PER LAW AFTER AFFORDING ADEQUATE OPPORTUNITY OF BEING HEARD TO BOTH THE SIDES. 6. IN THE RESULT, THE APPEAL OF THE REVENUE STANDS ALLOWED FOR STATISTICAL PURPOSES. (ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE) SD/. SD/. (SUNIL KUMAR YADAV) ( A. K. GARODIA ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 21 /04/2015 *C.L.SINGH COPY OF THE ORDER FOR WARDED TO : 1.THE APPELLANT 2.THE RESPONDENT. 3.CONCERNED CIT 4.THE CIT(A) 5.D.R., I.T.A.T., LUCKNOW ASSTT. REGISTRAR