ACIT, CHENNAI V. I.P.Rings Limited, CHENNAI

ITA 895/CHNY/2013

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 68713 (ITAT-CHENNAI)
• Duration Of Justice: 4 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-09-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 17-09-2013
• Assessment Year: 2002-2003
• Appeal Filed On: 06-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: T N BETGERI IRS
• Keywords: Revenue expenditure

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI BEFORE DR. O.K.NARAYANAN, VICE-PRESIDENT AND SHRI V.DURGA RAO, JUDICIAL MEMBER ITA NO. 690(MDS)/2013 ASSESSMENT YEAR : 2002-03 M/S IP RINGS LTD., ARJAY APEX CENTRE, 24, COLLEGE ROAD, CHENNAI 600 006. PAN-AAACI0908C VS. THE ASSISTANT COMMISSIONER OF INCOME-TAX, COMPANY CIRCLE-II(3), CHENNAI-34. (APPELLANT) (RESPONDENT) AND ITA NO. 895(MDS)/2013 ASSESSMENT YEAR : 2002-03 THE ASSISTANT COMMISSIONER OF INCOME-TAX, CHENNAI-34. VS. M/S IP RINGS LTD., CHENNAI 600 006. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI SAROJ KUMAR PARIDA DEPARTMENT BY : SHRI T.N.BETGERI, IRS, JCIT DATE OF HEARING : 17 TH SEPT., 2013 DATE OF PRONOUNCEMENT : 17 TH SEPT., 2013 O R D E R PER DR.O.K.NARAYANAN, VICE PRESIDENT THESE ARE TWO APPEALS FILED BY THE ASSESSEE AND T HE REVENUE. THE RELEVANT ASSESSMENT YEAR IS 2002-03. THESE ITA 690 & 895/13 :- 2 -: CROSS APPEALS ARE DIRECTED AGAINST THE ORDER OF TH E COMMISSIONER OF INCOME-TAX(APPEALS)-I AT COIMBATORE DATED 4.1.20 13. THE APPEALS ARISE OUT OF THE ASSESSMENT COMPLETED UNDER SEC.143(3), READ WITH SEC.254 OF THE INCOME-TAX ACT, 1961. 2. THE GROUND RAISED BY THE ASSESSEE IS THAT THE COMMISSIONER OF INCOME-TAX(APPEALS) HAS ERRED IN CO NFIRMING 25% OF THE ROYALTY EXPENDITURE AS CAPITAL EXPENDITU RE AND THE REMAINING 75% AS REVENUE EXPENDITURE. 3. ON THE OTHER HAND, THE GROUND RAISED BY THE REVE NUE IS THAT THE COMMISSIONER OF INCOME-TAX(APPEALS) HAS ERRED I N HOLDING THAT 25% OF THE ROYALTY PAYMENT IS CAPITAL EXPENDIT URE AND THE BALANCE 75% TO BE ALLOWED AS REVENUE EXPENDITURE. IN THAT WAY, THE GROUNDS RAISED BY THE ASSESSEE AND THE REVENUE IN THE PRESENT APPEAL ARE INVERSE. 4. IN FACT, THE VERY SAME ISSUE WAS CONSIDERED BY I NCOME-TAX APPELLATE TRIBUNAL, CHENNAI B BENCH IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEARS 1999-2000, 2003-04, 2004-05 AN D 2005-06 THROUGH THEIR ORDER DATED 25.2.2011 PASSED IN ITA N OS. 1716, 1717, 1718 AND 1719/MDS/2010 WHEREIN IT WAS HELD TH AT 25% OF ITA 690 & 895/13 :- 3 -: THE ROYALTY PAID BY THE ASSESSEE IS CAPITAL IN NATU RE, THEREBY 75% OF THE PAYMENT IS TO BE TREATED AS REVENUE EXPENDIT URE. IT IS TO BE SEEN THEREFORE THAT THE ORDER OF THE COMMISSIONER O F INCOME- TAX(APPEALS), IN APPORTIONING THE EXPENDITURE, HAS ALREADY BEEN UPHELD BY THE TRIBUNAL. IN THESE CIRCUMSTANCES, TH E GROUNDS RAISED BY THE ASSESSEE AS WELL AS BY THE REVENUE AR E LIABLE TO BE REJECTED. 5. IN RESULT, THESE APPEALS FILED BY THE ASSESSEE A S WELL AS BY THE REVENUE ARE DISMISSED. ORDERS PRONOUNCED IN THE OPEN COURT AT THE TIME OF HEARING ON TUESDAY, THE 17 TH OF SEPTEMBER, 2013 AT CHENNAI. SD/- SD/- (V.DURGA RAO) (DR. O.K.NARAYANAN) JUDICIAL MEMBER VICE-PRESIDENT CHENNAI, DATED, THE 17 TH SEPTEMBER, 2013. MPO* COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR 6. GF.