DCIT 1(2)(2), MUMBAI V. MURJANI RETAIL P.LTD, MUMBAI

ITA 5846/MUM/2016

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 7034 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-06-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: I
• Assessment Year: 2009-2010
• Appeal Filed On: 30-09-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SAURABH DESHPANDEYDR
• Assessee Lawyers: RITESH SINGH
• Section: 43B

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES I, MUMBAI , . , , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER, AND SHRI G. MANJUNATHA, ACCOUNTANT MEMBER ITA NO.5846/MUM/2016 ASSESSMENT YEAR: 2009-10 DCIT-1(2)(2), ROOM NO.535, 5 TH FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI-400020 / VS. M/S MURJANI RETAIL P. LTD. 4 TH FLOOR, METRO DOME, METRO THEATRE, M.G. ROAD, MUMBAI-400020 ( / REVENUE) ( ! ' /ASSESSEE) P.A. NO.AAECM6057A C.O. NO.142/MUM/2016 (ARISING OUT OF ITA NO.5846/MUM/2016) ASSESSMENT YEAR: 2009-10 M/S MURJANI RETAIL P. LTD. 4 TH FLOOR, METRO DOME, METRO THEATRE, M.G. ROAD, MUMBAI-400020 / VS. DCIT-1(2)(2), ROOM NO.535, 5 TH FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI-400020 ( ! ' /ASSESSEE) ( / REVENUE) P.A. NO.AAECM6057A ITA NO.5846/MUM/2016 & C.O. NO.142/MUM/2016 M/S MURJANI RETAIL PVT. LTD. 2 / REVENUE BY SHRI SAURABH DESHPANDEY-DR ! ' / ASSESSEE BY SHRI RITESH SINGH # $ % ' & / DATE OF HEARING : 05/06/2018 % ' & / DATE OF PRONOUNCEMENT 05/06/2018 / O R D E R PER JOGINDER SINGH (JUDICIAL MEMBER) THE REVENUE IS AGGRIEVED BY THE IMPUGNED ORDER DATED 15/06/2016 OF THE LD. FIRST APPELLATE AUTHORI TY, MUMBAI AND THE ASSESSEE HAS PREFERRED CROSS OBJECTI ON. 2. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IN THE AP PEAL OF THE REVENUE, THE FIRST GROUND AGITATED BY THE LD. D R IS WITH RESPECT TO DISALLOWANCE MADE UNDER SECTION 43B OF T HE INCOME TAX ACT, 1961 (HEREINAFTER THE ACT) AMOUNTIN G TO RS.1,57,41,631/-. BEFORE THE LD. COMMISSIONER OF IN COME TAX (APPEAL), IN ITS WRITTEN SUBMISSIONS, THE ASSES SEE CLAIMED THAT THE IMPUGNED AMOUNT WAS NOT DEBITED TO PROFIT & LOSS ACCOUNT AND FURTHER WAS NOT CLAIMED A S EXPENDITURE AND THUS CANNOT BE ADDED UNDER SECTION 43B ITA NO.5846/MUM/2016 & C.O. NO.142/MUM/2016 M/S MURJANI RETAIL PVT. LTD. 3 OF THE ACT. THIS FACT WAS CLAIMED TO BE EXPRESSLY S TATED IN THE TAX AUDIT REPORT AT ANNEXURE-VII TO CLAUSE 21(BUSINESS)(I) & (II). THIS FACTUAL ASPECT WAS NOT CONTROVERTED BY THE REVENUE. THERE IS UNCONTROVERT ED FINDING IN THE IMPUGNED ORDER THAT SUCH EXPENSES HA S NOT BEEN CLAIMED BY THE ASSESSEE, THEREFORE, THE ADDITI ON WAS RIGHTLY DELETED, CONSEQUENTLY, WE AFFIRM THE STAND OF THE LD. COMMISSIONER OF INCOME TAX (APPEAL). 3. THE NEXT GROUND RAISED BY THE REVENUE PERTAINS TO DISALLOWANCE OF SUM OF RS.1,39,73,469/- ON ACCOU NT OF RENT PAYMENT TO M/S TAG ENTERPRISES. THE LD. COUNSE L FOR THE ASSESSEE, BEFORE THE LD. COMMISSIONER OF INCOME TAX (APPEAL), AS WELL AS BEFORE US, EXPLAINED THAT THE OFFICE SPACE WAS SHARED BETWEEN THE ASSESSEE AND ITS GROUP AFFILIATES AS PER CLAUSE -14 OF THE AGREEMENT ON AS SIGNMENT. AS PER THIS CLAUSE, AN EXPRESS PERMISSION WAS GIVEN BY THE LICENSOR TO THE LICENSEE TO ASSIGN LICENSEES RIGHT S TO THE LISTED SPECIFIC AFFILIATE WHICH INCLUDES THE ASSESS EE. SINCE, THE OFFICE WAS UTILIZED FOR BUSINESS PURPOSES, WHIC H IS EVEN NOT DISPUTED BY THE ASSESSING OFFICER, PURSUANT TO AN ITA NO.5846/MUM/2016 & C.O. NO.142/MUM/2016 M/S MURJANI RETAIL PVT. LTD. 4 AGREEMENT AND TDS WAS DEDUCTED UNDER SECTION 194-I AS PER LEAVE AND LICENSE AGREEMENT DATED 29/06/2007 EN TERED BETWEEN M/S TAG ENTERPRISES AND M/S BRNAD MARKETING INDIA PVT. LTD., THE LICENSOR PERMITTED THE LICENSE E M/S BRAND MARKETING INDIA LTD., THE RIGHT TO ASSIGN THE PREMISES AS PER CLAUSE-14 OF THE AGREEMENT, WHICH H AS BEEN REPRODUCED IN THE IMPUGNED ORDER AND UNCONTROVERTED FACT THAT ABOVE TWO GROUP COMPANIES ALONG WITH THE ASSESSEE SHARED THE PREMISES AND THE RENT/AMENITIES, THEREFORE, IT IS AN ALLOWABLE EXPEN DITURE. THE STAND OF THE LD. COMMISSIONER OF INCOME TAX (AP PEAL) IS AFFIRMED. 4. SO FAR AS, THE CROSS OBJECTION OF THE ASSESSEE IS CONCERNED, THE CRUX OF THE ARGUMENT ON BEHALF OF TH E ASSESSEE IS THAT IF THE CLAIM OF THE ASSESSEE IS AL LOWED AND THE APPEAL OF THE REVENUE IS DISMISSED, THE CROSS O BJECTION OF THE ASSESSEE WILL BECOME IN-FRUCTUOUS. IN VIEW O F THE ABOVE, SINCE, THE STAND TAKEN BY THE LD. COMMISSION ER OF INCOME TAX (APPEAL), IS AFFIRMED, THE CROSS OBJECTI ON OF THE ITA NO.5846/MUM/2016 & C.O. NO.142/MUM/2016 M/S MURJANI RETAIL PVT. LTD. 5 ASSESSEE HAS BECOME IN-FRUCTUOUS, CONSEQUENTLY, DISMISSED. FINALLY, THE APPEAL OF THE REVENUE AS WELL AS THE C ROSS OBJECTION OF THE ASSESSEE ARE DISMISSED. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. REPRESENTATIVES FROM BOTH SIDES AT THE CONCLUSION OF THE HEARING ON 05/06/2018. SD/- (G. MANJUNATHA) SD/- (JOGINDER SINGH) '# / ACCOUNTANT MEMBER $# / JUDICIAL MEMBER # $ MUMBAI; + DATED : 05/06/2018 F{X~{T? P.S/. . . , %$&'()(*& / COPY OF THE ORDER FORWARDED TO : 1. ,-./ / THE APPELLANT 2. 01./ / THE RESPONDENT. 3. 2 2 # 3' , ( ,- ) / THE CIT, MUMBAI. 4. 2 2 # 3' / CIT(A)- , MUMBAI 5. 56 0' , 2 ,-& , , # $ / DR, ITAT, MUMBAI 6. 7 8$ / GUARD FILE. / BY ORDER, / (DY./ASSTT. REGISTRAR) , # $ / ITAT, MUMBAI