ACIT Corporate Circle 6(1)(i/c), CHENNAI V. Shriram Chits Tamilnadu Pvt Ltd., CHENNAI

ITA 810/CHNY/2019

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 2635 (ITAT-CHENNAI)
• Duration Of Justice: 5 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-08-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2014-2015
• Appeal Filed On: 26-03-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R CLEMENT RAMESH KUMAR
• Assessee Lawyers: SAMIREDDY SAI SARAT CHANDRA
• Keywords: Revenue expenditure
• Section: 37(1)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH: CHENNAI . . , . , BEFORE SHRI DUVVURU R.L. REDDY, JUDICIAL MEMBER AND SHRI S. JAYARAMAN, ACCOUNTANT MEMBER ./ ITA NO.810/CHNY/2019 /ASSESSMENT YEAR: 2014-15 THE ASST. COMMISSIONER OF- INCOME TAX, CORPORATE CIRCLE-6(1)(I/C), CHENNAI. VS. M/S.SHRIRAM CHITS TAMILNADU- PVT. LTD., NO.1, 2 ND FLOOR, NO.145, SANTHOME HIGH ROAD, MYLAPORE, CHENNAI-600 004. [PAN: AABCS 0167 N] ( # /APPELLANT) ( $%# /RESPONDENT) DEPARTMENT BY : MR. R.CLEMENT RAMESH- KUMAR, ADDL.CIT ASSESSEE BY : MR.SAMIREDDY SAI SARAT- CHANDRA, ADV. ' /DATE OF HEARING : 10.07.2019 ' /DT. OF PRONOUNCEMENT : 26.08.2019 / O R D E R PER SHRI DUVVURU R.L. REDDY, JUDICIAL MEMBER : THE REVENUE FILED THIS APPEAL AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-15, CHENNAI, IN ITA NO.413/ 2016-17/CIT(A)-15 DATED 31.12.2018 FOR THE AY 2013-14. 2. THE ONLY GRIEVANCE OF THE REVENUE IS THAT THE LD.C IT(A) DIRECTED THE AO TO ALLOW THE ROYALTY PAYMENTS CLAIMED BY THE ASS ESSEE. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS: ITA NO.810/CHNY/2019 :- 2 -: 1. THE ORDER OF THE LD. CIT(A) IS CONTRARY TO THE LAW AND FACTS OF THE CASE. 2. THE LD. CIT(A) ERRED IN DELETING THE DISAL LOWANCE OF ROYALTY CLAIM OF RS.72,21,334/- BY RELYING ON THE DECISION OF THE HO N'BLE TRIBUNAL VIDE ITS ORDER IN ITA NO.2743/MDS/2016 DATED 10-02-2017 FOR AY 2013-1 4 IN THE ASSESSEE'S OWN CASE, DECIDED IN FAVOUR OF THE ASSESSEE. 2.1. THE LD. CIT(A) FAILED TO APPRECIATE THAT THE REVENUE HAS FILED AN APPEAL AGAINST THE ORDER OF THE HON'BLE TRIBUNAL BEFORE TH E HON'BLE HIGH COURT MADRAS, WHICH IS STILL PENDING. 2.2. THE LD. CIT(A) ERRED IN TREATING THE EXPENDITU RE ON ROYALTY AS REVENUE IN NATURE, THOUGH THE ASSESSEE HAD GOT AN ENDURING BEN EFIT ON ACQUIRING THE INTANGIBLE ASSET. 3. FOR THESE AND OTHER GROUNDS THAT MAY BE ADDUCED AT THE TIME OF HEARING, IT IS PRAYED THAT THE ORDER OF THE LD. CIT(A) BE SET A SIDE AND THAT OF THE ASSESSING OFFICER RESTORED. 3. THE LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE SAME ISSUE HAS BEEN TAKEN UP BY THE HONBLE ITAT IN THE ASSESSEES OWN CASE FOR THE AY 2013-14 AND DECIDED THIS ISSUE IN FAVOUR OF THE ASS ESSEE. 4. PER CONTRA, THE LD.COUNSEL FOR THE DR SUBMITTED TH AT THIS ISSUE HAS NOT REACHED ITS FINALITY AND THE APPEAL IS PENDING BEFORE THE HONBLE JURISDICTIONAL HIGH COURT. THEREFORE, THE ORDERS PA SSED BY THE LD.CIT(A) TO BE CONFIRMED. 5. WE HAVE HEARD BOTH THE SIDES AND PERUSED THE MATER IALS AVAILABLE ON RECORD. WE HAVE ALSO PERUSED THE ORDERS OF TRIB UNAL IN THE ASSESSEES OWN CASE FOR THE AY 2013-14 IN ITA NO.2743/MDS/2016 DATED 10.02.2017. THE SAME IS RE-PRODUCED HEREUNDER: .4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITHER SIDE AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THIS TRIBUNAL IN THE ASSESSEE S OWN CASE IN ITA NO.373/MDS/2016 FOUND THAT FOR USING THE LOGO WHICH BELONGS TO SHRI RAM OWNERSHIP TRUST, THE ASSESSEE HAS TO NECESSARILY MAKE PAYMENT. THE PAYMENT WAS MADE O N THE BASIS OF THE TURNOVER. IN SIMILAR CIRCUMSTANCES, THIS TRIBUNAL FOUND THAT THE ROYALTY PAYMENT HAS TO BE ALLOWED AS ITA NO.810/CHNY/2019 :- 3 -: REVENUE EXPENDITURE UNDER SECTION 37(1) OF THE INCOM E TAX ACT, 1961 (IN SHORT THE ACT). IN VIEW OF THE ABOVE, THIS TRIBUNAL IS OF THE CONSI DERED OPINION THAT THE CIT (APPEALS) HAS RIGHTLY ALLOWED THE CLAIM OF THE ASSESSEE. MERE PEN DENCY OF THE APPEAL BEFORE THE HIGH COURT IS NOT A REASON FOR TAKING A DIFFERENT VIEW. THEREFORE, THIS TRIBUNAL DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF THE LOWER AUT HORITY. ACCORDINGLY, THE SAME IS CONFIRMED. 6. THE LD.DR COULD NOT CONTROVERT THE FINDINGS OF THE TRIBUNAL BY FILING ORDER OF ANY HIGHER COURT OR MODIFIED OR RECTIFIED OR REVERSED. IN VIEW OF THE ABOVE, WE ARE OF THE CONSIDERED OPINION THAT TH E LD.CIT(A) HAS RIGHTLY ALLOWED THE CLAIM OF THE ASSESSEE. THEREFORE, WE A RE OF THE FIRM VIEW THAT WE DO NOT FIND ANY REASON TO INTERFERE WITH THE ORD ERS OF THE LOWER AUTHORITIES. CONSEQUENTLY, THE GROUNDS RAISED BY T HE REVENUE ARE DISMISSED. 7. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED ON THE 26 TH DAY OF AUGUST, 2019, IN CHENNAI. SD/- SD/- ( . ) (S. JAYARAMAN) /ACCOUNTANT MEMBER ( , - . . . ) (DUVVURU R.L. REDDY) /JUDICIAL MEMBER /CHENNAI, 0 /DATED: 26 TH AUGUST, 2019. TLN ' $12 32 /COPY TO: 1. # /APPELLANT 4. 4 /CIT 2. $%# /RESPONDENT 5. 2 $ /DR 3. 4 ( ) /CIT(A) 6. /GF