Piruz A. Khambhatta, Ahmedabad V. The A.C.I.T., Circle-5, Ahmedabad

MA 166/AHD/2012

• Counselvise Citation: [2012] 123 COUNSELVISE.COM (IT) 9200 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 month(s) 2 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 30-11-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2002-2003
• Appeal Filed On: 27-08-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RAHUL KUMAR
• Assessee Lawyers: PF JAIN
• Keywords: Capital asset; Depreciation; Capital receipt; Bonafide mistake; Capital expenditure

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, A BENCH, AHMEDABAD BEFORE SHRI G. C. GUPTA, HONBLE VICE PRESIDENT AND SHRI A. K. GARODIA, ACCOUNTANT MEMBER M.A.166/AHD/2012 IN I.T.A. NO.41 / AHD/2007 (ASSESSMENT YEAR 2002-03) PIRUZ A KHAMBATTA, B/H ELLISBRIDGE GYMKHANA, ELLISBRIDGE, AHMEDABAD VS. ACIT, CIRCLE 5, AHMEDABAD PAN/GIR NO. : ABMPG6324N (APPELLANT) .. (RESPONDENT) APPLICANT BY: SHRI P F JAIN, AR RESPONDENT BY: SHRI RAHUL KUMAR, SR. DR DATE OF HEARING: 02.11.2012 DATE OF PRONOUNCEMENT: 30.11.2012 O R D E R PER SHRI A. K. GARODIA, AM:- THIS MISCELLANEOUS APPLICATION IS FILED BY THE ASS ESSEE ALLEGING CERTAIN MISTAKES IN THE TRIBUNAL ORDER DATED 21.12. 2011. 2. THE FIRST MISTAKE ALLEGED IS THIS THAT GROUND NO .1 OF THE REVENUE HAS BEEN WRONGLY REPRODUCED IN THE TRIBUNAL ORDER. THE ASSESSEE HAS REPRODUCED IN THE MISCELLANEOUS APPLICATION THE GRO UND NO.1 OF THE REVENUE AS PER APPEAL MEMO FILED BY THE REVENUE AND ALSO AS IS REPRODUCED IN THE IMPUGNED TRIBUNAL ORDER. WHILE G OING THROUGH THIS GROUND, AS PER APPEAL MEMO OF THE REVENUE AS REPROD UCED IN THE IMPUGNED TRIBUNAL ORDER, WE FIND THAT IN FACT, THER E IS A MISTAKE IN THE GROUND REPRODUCED BY THE TRIBUNAL IN THE IMPUGNED T RIBUNAL ORDER AND, THEREFORE, WE RECTIFY THE IMPUGNED TRIBUNAL ORDER A ND HOLD THAT GROUND M.A.NO.166 /AHD/2012 2 NO.1 OF THE REVENUES APPEAL REPRODUCED ON PAGE 1 O F THE IMPUGNED TRIBUNAL ORDER SHOULD BE READ AS UNDER: THE LD. CIT(A) XI, AHMEDABAD HAS ERRED IN LAW AND ON FACT IN 1DELETING THE ADDITION MADE OF RS.5,25,00,000/- BEI NG THE AMOUNT RECEIVED BY THE ASSESSEE FROM RASNA PRIVATE LIMITED IN ACCOUNT OF GIVING NON COMPETE TERRITORY RIGHT. 3. THE NEXT MISTAKE POINTED OUT BY THE ASSESSEE IN THE MISCELLANEOUS APPLICATION IS THIS THAT AS PER THE FINDING OF LD. CIT(A) REPRODUCED BY THE TRIBUNAL IN THE IMPUGNED TRIBUNAL ORDER, IT HAS BEE N STATED BY LD. CIT(A) THAT THE A.O. DID NOT ACCEPT THE CLAIM OF TH E COMPANY M/S. RASNA PVT. LTD. AND THE MATTER IS BEFORE THE HONBLE GUJA RAT HIGH COURT AND IT IS EXPECTED THAT HONBLE GUJARAT HIGH COURT WOULD BE D ECIDING WHETHER THIS COMPANY IS CORRECT TO TREAT NON COMPETE TERRITORY R IGHT AS NOT INTANGIBLE ASSET AND THE ASSESSEE IS NOT ENTITLED TO CLAIM DEP RECIATION THEREON. IT IS FURTHER SUBMITTED THAT HONBLE GUJARAT HIGH COURTS JUDGEMENT ON THIS CIVIL APPLICATION IS AWAITED. IT IS ALSO STATED BY LD. CIT(A) THAT WHETHER THE ISSUE AS TO WHETHER THE ASSESSEE HAD RECEIVED C APITAL RECEIPT OR REVENUE RECEIPT IS ALSO CONNECTED WITH THE ISSUE WH ICH IS SUB-JUDICE BEFORE THE HONBLE GUJARAT HIGH COURT. THEREAFTER, IT HAS BEEN STATED BY THE ASSESSEE IN THE MISCELLANEOUS APPLICATION THAT THESE FINDINGS OF LD. CIT(A), WHICH GOES TO THE ROOT OF THE MATTER, HAVE NOT BEEN CONSIDERED BY THE TRIBUNAL. IT IS ALSO SUBMITTED THAT HONBLE GU JARAT HIGH COURT HAD SUBSEQUENTLY RENDERED THE DECISION ON 09.07.212 IN THE CASE OF M/S. RASNA PVT. LTD. AND IT WAS HELD THAT IT IS NOT THE CASE OF THE DEPARTMENT THAT NON COMPETE STATUTORY RIGHT ARE NOT INTANGIBLE ASSET AND, THEREFORE, THE COMPANY IS NOT ENTITLED TO DEPRECIATION THEREON AND ON THE BASIS OF THIS OBSERVATION, THE CLAIM OF THE COMPANY M/S. RAS NA PVT. LTD. HAS BEEN ALLOWED. IT IS FURTHER SUBMITTED THAT SINCE THE DE PARTMENT HAS ACCEPTED IT TO BE CAPITAL ASSET IN THE HANDS OF THE COMPANY M/S . RASNA PVT. LTD. AND, M.A.NO.166 /AHD/2012 3 THEREFORE, THE SAME IS TO BE TREATED IN THE HANDS O F THE ASSESSEE AS CAPITAL RECEIPT AND, THEREFORE, THIS JUDGEMENT OF HONBLE G UJARAT HIGH COURT FULLY COVERS THE ISSUE OF THE PRESENT CASE. THE AS SESSEE HAS ENCLOSED A COPY OF THIS JUDGEMENT OF HONBLE GUJARAT HIGH COUR T ALONG WITH THE MISCELLANEOUS APPLICATION. THE ASSESSEE FURTHER SU BMITTED THAT AS PER THE JUDGMENT OF HONBLE GUJARAT HIGH COURT RENDERED IN THE CASE OF SAURASHTRA KUTCH EXCHANGE LTD. REPORTED IN 262 ITR 146, IT WAS HELD THAT THE DECISION OF JURISDICTIONAL HIGH COURT EVEN IF R ENDERED SUBSEQUENTLY, WOULD CONSTITUTE A MISTAKE APPARENT FORM THE RECORD AND, THEREFORE, THE SAME SHOULD BE RECTIFIED U/S 254(2) OF THE INCOME T AX ACT, 1961. 4. IT IS FURTHER ALLEGED THAT THE TRIBUNAL HAS MERE LY COPIED THE FACTS FROM THE A.O.S ORDER AND NOT CONSIDERED THE CLAUSE S 3-5 OF THE AGREEMENT PLACED AT PAGES 1-6 OF THE PAPER BOOK. IT IS FURTH ER ALLEGED THAT IT IS STATED BY THE TRIBUNAL IN PARA 5 OF THE IMPUGNED TRIBUNAL ORDER THAT THIS AMOUNT WAS BROUGHT TO TAX BY THE A.O. ON THE BASIS THAT AS PER THE AGREEMENT BETWEEN THE ASSESSEE AND M/S. RASNA PVT. LTD. (RPL) , THE ASSESSEE HAS GIVEN TO RPL NON COMPETE TERRITORY RIGHT LICENCE FO R THE USE OF TRADEMARK ON YEARLY BASIS FOR THE PERIOD OF 5 YEARS AND HENCE , IT IS NOT A CAPITAL RECEIPT BUT THE A.O. HAS NOT REPORTED SUCH FINDING AND IT IS ALSO CONTRARY TO THE TERMS OF AGREEMENT AS NOTED IN PARA 2 PAGE 2 OF THE TRIBUNAL ORDER. THE RELEVANT PARA HAS BEEN REPRODUCED BY THE ASSESS EE IN ITS MISCELLANEOUS APPLICATION WHICH IS AS UNDER: ..VIDE THIS AGREEMENT NON COMPETE EXCLUSIVE TERRI TORY RIGHT OF THE USE OF TRADE MARK IN THE TERRITORY OF INDIA WAS GIVEN TO RPL. 5. THE NEXT ALLEGATION IS THIS THAT THE TRIBUNAL HA D STATED THAT THE ASSESSEE HAS GIVEN TO RPL ONLY THE RIGHT TO USE TRA DE MARK ON YEARLY BASIS FOR A PERIOD OF 5 YEARS BUT THERE IS NO BASIS FOR T HIS OBSERVATION IN THE TRIBUNAL ORDER. THE NEXT ALLEGATION IS THAT IT IS ALSO STATED BY THE TRIBUNAL M.A.NO.166 /AHD/2012 4 THAT THE AGREEMENT IS NOT FOR NOT CARRYING OUT ANY ACTIVITY BUT THE AGREEMENT IS FOR THIS THAT THE ASSESSEE HAS AUTHORI ZED RPL TO USE TRADE MARK. IT IS ALLEGED THAT AS PER THE RECITAL OF CL AUSE 3-5 OF THE AGREEMENT, THIS OBSERVATION OF THE TRIBUNAL IS NOT CORRECT. I T IS ALSO ALLEGED THAT THE TRIBUNAL HAS NOT FOLLOWED THE DECISION OF SPECIAL B ENCH OF THE TRIBUNAL RENDERED IN THE CASE OF SAURABH SRIVASTAVA (SUPRA) ON WRONG BASIS THAT THE ASSESSEE HAS PROVIDED NON COMPETE RIGHT FOR THE USE OF TRADE MARK IN THE TERRITORY OF INDIA AND THE RECEIPT IS NOT FROM NON COMPETE RIGHT. 6. THEREAFTER, SEVERAL JUDGEMENTS ARE CITED IN SUPP ORT OF THIS CONTENTION THAT WHERE THE TRIBUNAL FAILS OR OMIT TO DEAL WITH AN IMPORTANT CONTENTION, IT SHOULD BE DEEMED TO BE APPARENT MIST AKE IN THE TRIBUNAL ORDER AND SHOULD BE RECTIFIED U/S 254(2) OF THE INC OME TAX ACT, 1961. 7. IN THE COURSE OF HEARING BEFORE US, THE LD. A.R. REITERATED THE SAME CONTENTIONS WHICH ARE RAISED BY THE ASSESSEE IN THE MISCELLANEOUS APPLICATION. IN ADDITION TO THIS, HE PLACED RELIAN CE ON THE JUDGMENT OF HONBLE CALCUTTA HIGH COURT RENDERED IN THE CASE OF HARI SHANKAR BHATIA VS CIT AS REPORTED IN 65 DTR 380 (CAL.) AND ON A DE CISION OF MUMBAI BENCH OF THE TRIBUNAL RENDERED IN THE CASE OF GODLY MEADOWS PROPERTIES PVT. LTD. VS ITO AS REPORTED IN 149 TAXMAN 17. REL IANCE WAS ALSO PLACED ON THE JUDGEMENT OF HONBLE GUJARAT HIGH COU RT RENDERED IN THE CASE OF NIRANJAN K ZAVERI AS REPORTED IN 20 DTR 153 (GUJ.). 8. AS AGAINST THIS, LD. D.R. SUBMITTED THAT THERE I S NO APPARENT MISTAKE IN THE TRIBUNAL ORDER AND THE CONTENTIONS R AISED IN THE MISCELLANEOUS APPLICATION ARE FOR REVIEW WHICH CANN OT BE ACCEPTED. RELIANCE WAS ALSO PLACED ON THE JUDGEMENT OF HONBL E BOMBAY HIGH COURT RENDERED IN THE CASE OF RAMESH ELECTRICITY AS REPORTED IN 203 ITR 497 AND ALSO THE JUDGEMENT OF GAUHATI HIGH COURT RE NDERED IN THE CASE OF CIT VS PRAHLAD RAI TODI 251 ITR 833. M.A.NO.166 /AHD/2012 5 9. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS, PERUSE D THE MATERIAL ON RECORD AND HAVE GONE THROUGH THE JUDGEMENTS CITED B Y BOTH THE SIDES. WE WILL NOW EXAMINE EACH AND EVERY OBJECTION RAISED BY THE ASSESSEE IN THE MISCELLANEOUS APPLICATION. THE FIRST OBJECTION IS THIS THAT REFERENCE WAS MADE BY LD. CIT(A) TO THE ISSUE PENDING BEFORE THE HONBLE GUJARAT HIGH COURT IN THE CASE OF M/S. RASNA PVT. LTD. AND THEREAFTER, AS PER THE JUDGMENT OF HONBLE GUJARAT HIGH COURT RENDERED ON 06.07.2012, IT WAS HELD THAT RPL IS ELIGIBLE FOR DEPRECIATION. WE ARE OF THE CONSIDERED OPINION THAT THIS ASPECT HAS GOT NO BEARING IN THE PRESENT CASE BECAUSE WHETHER A PAYMENT HAS BEEN CONSIDERED AS REVENUE EX PENDITURE OR CAPITAL EXPENDITURE, IN THE HANDS OF THE PAYER, CANNOT DETE RMINE THE CHARACTER OF RECEIPT IN THE HANDS OF THE RECEIVER. IF A PERSON IS DEALING IN REAL ESTATE AND HE HAS SOLD SOME PROPERTY TO A PERSON WHO IS NO T DEALING IN THE REAL ESTATE, SUCH PROPERTY WOULD BE CONSIDERED AS CAPITA L ASSET IN THE HANDS OF THE BUYER BUT THAT WILL NOT CHANGE THE CHARACTER OF RECEIPT IN THE HANDS OF THE SELLER WHICH HAS TO BE CONSIDERED AS REVENUE RE CEIPT ONLY. WE ALSO FIND THAT THIS JUDGEMENT OF HONBLE GUJARAT HIGH CO URT RENDERED IN THE CASE OF RASNA PVT. LTD. (SUPRA) DATED 09.07.2012 DE CIDES ON THIS ASPECT ONLY THAT THE REOPENING WAS NOT VALID IN THAT CASE AND HENCE, THIS JUDGEMENT HAS GOT NO BEARING ON THE MERITS OF THE I SSUE AS TO WHETHER THE RECEIPT IN THE HANDS OF THE ASSESSEE IS REVENUE REC EIPT OR CAPITAL RECEIPT AND, THEREFORE, THIS MISTAKE POINTED OUT BY THE ASS ESSEE IN THE MISCELLANEOUS APPLICATION IS NOT EVEN A MISTAKE AS AGAINST REQUIREMENT OF APPARENT MISTAKE FOR RECTIFICATION OF THE TRIBUNAL ORDER U/S 254(2) OF THE INCOME TAX ACT, 1961. SINCE THE DECISION OF HONBL E GUJARAT HIGH COURT IN THE CASE OF RPL IS ON THE ISSUE OF REOPENING, TH E SAME IS NOT RELEVANT FOR RECTIFICATION OF THE IMPUGNED TRIBUNAL ORDER IN THE PRESENT CASE AS PER M.A.NO.166 /AHD/2012 6 THE JUDGEMENT OF HONBLE GUJARAT HIGH COURT RENDERE D IN THE CASE OF SAURASHTSRA KUTCH EXCHANGE LTD (SUPRA). 10. THE 2 ND OBJECTION TAKEN BY THE ASSESSEE IN THE MISCELLANEO US APPLICATION IS THIS THAT THE TRIBUNAL HAS MERELY CO PIED THE FACTS FROM THE ASSESSMENT ORDER AND OMITTED TO NOTE AND CONSIDER R ECITAL OF CLAUSE 3-5 OF THE AGREEMENT PLACED AT PAGE 7 OF THE PAPER BOOK. FROM PAGE 3 OF THE PAPER BOOK, WE FIND THAT CLAUSE 1 OF THE AGREEMENT IS AS UNDER: 1. LICENSOR GIVES EXCLUSIVE USER TRADEMARK RIGHT A S ANNEXED TO RPL FOR TERRITORY OF INDIA. 11. ALONG WITH THIS, THE ASSESSEE HAS ALSO AGREED A S PER THIS AGREEMENT THAT THE ASSESSEE WILL NOT PERMIT ANY OTHER 3 RD PARTY TO COMPETE WITH RPL UNDER THE SAID TRADE MARK AND THE ASSESSEE WILL AL SO NOT COMPETE WITH RPL DIRECTLY OR INDIRECTLY. IN PARA 6 OF THE TRIBU NAL ORDER, IT IS OBSERVED BY THE TRIBUNAL THAT IF THE SERVICE PROVIDER OR SEL LER ALSO AGREES FOR NON- COMPETITION AND NO SEPARATE AMOUNT AS CONSIDERATION FOR THE SAME IS CHARGED, IT CANNOT BE SAID THAT THE AMOUNT RECEIVED BY THE SERVICE PROVIDER OR SELLER IS FOR SUCH NON-COMPETITION AGRE EMENT EVEN TO THE EXTENT OF PART AMOUNT OF CONSIDERATION RECEIVED BY THE SERVICE PROVIDER/SELLER. IT IS FURTHER EXPLAINED BY THE TR IBUNAL BY GIVING AN EXAMPLE ON PAGE 6-7 OF THE IMPUGNED TRIBUNAL ORDER AND HENCE, THIS ALLEGATION IS NOT CORRECT THAT THE TRIBUNAL HAS NOT CONSIDERED THE RECITALS OF CLAUSES 3-5 OF THE AGREEMENT PLACED AT PAGES 1-6 OF THE PAPER BOOK. THE TRIBUNAL HAS DULY CONSIDERED VARIOUS CLAUSES OF THIS AGREEMENT AND IT WAS HELD BY THE TRIBUNAL THAT ALONG WITH THE RIGHT TO USE THE TRADE MARK, THE ASSESSEE HAS ALSO AGREED FOR NON-COMPETITION WI THOUT CHARGING ANY EXTRA AMOUNT FOR SUCH NON COMPETITION AND HENCE, TH E RECEIPT OF THE ASSESSEE IS FOR THE PURPOSE OF ALLOWING RPL TO USE THE TRADE MARK AND NOT FOR NON COMPETITION. THIS IS NOT THE CASE OF THE AS SESSEE IN THE M.A.NO.166 /AHD/2012 7 MISCELLANEOUS APPLICATION THAT RPL WAS NOT ALLOWED TO USE THE TRADE MARK. THIS IS ALSO NOT THE CLAIM OF THE ASSESSEE I N THE MISCELLANEOUS APPLICATION THAT ANY SEPARATE AMOUNT WAS CHARGED FO R THE USE OF TRADE MARK AND SEPARATE AMOUNT FOR NON COMPETITION AND HE NCE, IT CANNOT BE SAID THAT THERE IS ANY APPARENT MISTAKE IN THE TRIB UNAL ORDER ON THIS ASPECT. 12. THE 3 RD ALLEGATION IS THIS THAT IT IS STATED BY THE TRIBUN AL IN PARA 5 OF THE IMPUGNED TRIBUNAL ORDER THAT THIS AMOUNT WAS BR OUGHT TO TAX BY THE A.O. ON THE BASIS THAT AS PER THE AGREEMENT BETWEEN THE ASSESSEE AND RPL, THE ASSESSEE HAS GIVEN TO RPL NON COMPETITION RIGHT LICENSE AND TO USE THE TRADE MARK ON YEARLY BASIS FOR A PERIOD OF 5 YEARS AND HENCE, IT IS NOT A CAPITAL RECEIPT. IT IS STATED IN THE MISCELL ANEOUS APPLICATION THAT THE A.O. HAS NOT RECORDED SUCH FINDING AND IT IS CONTRA RY TO THE TERMS OF AGREEMENT AS NOTED IN PAGE 2 OF THE TRIBUNAL ORDER, RELEVANT PORTION OF WHICH HAS BEEN REPRODUCED IN THE MISCELLANEOUS APPL ICATION AND BY US ALSO ABOVE. WHEN WE EXAMINE THE ASSESSMENT ORDER I N THE LIGHT OF THIS ALLEGATION OF THE ASSESSEE IN THE MISCELLANEOUS APP LICATION, WE FIND THAT THE LAST PARA ON PAGE 5 OF THE ASSESSMENT ORDER IS AS UNDER: THE FACT OF THE CASE IS THAT A NON-COMPETE TRADEMA RK TERRITORIAL AGREEMENT WAS ENTERED BETWEEN PIRUZ KHAMBATTA, (THE ASSESSEE) AS THE LICENSOR AND RASNA PVT. LTD. (RPL). THE ASSESSE E OWNS RIGHTS IN THE WELL KNOWN TRADE MARKS AND POSSESSES VALUABL E GOODWILL OF THE BUSINESS ASSOCIATED THEREWITH DUE TO EXTENSIVE USE OF THE SAID TRADE MARK. THE ASSESSEE HAS GIVEN TO THE RPL NON-E XCLUSIVE LICENSE FOR THE USE OF TRADEMARK ON YEARLY BASIS. V IDE THIS AGREEMENT NON-COMPETE EXCLUSIVE TERRITORY RIGHT FOR THE USE OF TRADEMARK IN THE TERRITORY OF INDIA WAS GIVEN TO RP L. IT IS PERTINENT TO NOTE THAT THE SAME HAVE BEEN SHOWN AS AN ACQUISI TION OF INTANGIBLE ASSET BY RPL IN ITS RETURN OF INCOME FOR A.Y.02-03 AND ON WHICH DEPRECIATION HAS BEEN CLAIMED BY THE RPL. ON GOING THROUGH THE VARIOUS TERMS AND CONDITIONS ATTACHED T O THE GIVING OF THESE RIGHTS BY THE LICENSOR IT CAN BE SAFELY CONCL UDED THAT THERE IS M.A.NO.166 /AHD/2012 8 NO TRANSFER OF ANY CAPITAL ASSET. THE RELEVANT PORT ION OF THE AGREEMENT IS BEING DISCUSSED BELOW :- 'POINT-7. THIS AGREEMENT, AND THE RIGHTS HEREUNDER, SHALL NOT HE ASSIGNABLE OR TRANSFERABLE, IN WHOLE OR IN PART, WI THOUT THE WRITTEN CONSENT OF LICENSOR IN EACH INSTANCE....... POINT NO. 11- THIS AGREEMENT SHALL BECOME EFFECTIVE ON THE DATE FIRST ABOVE RETURN, AND SHALL BE VALID FOR A PERIOD OF FIVE YCARS (5 YEARS). POINT NO. 12 - THE RPL SHALL PAY A LUMPSUM AMOUNT O F RS. 5.25 CRORES FOR THE TENURE OF THIS PRESENCE TOWARDS TERR ITORIAL NON- COMPETE RIGHTS GIVEN BY THE LICENSOR HEREINABOVE. POINT NO. 15 RPL SHALL NOT THEREAFTER CLAIM, ACQU IRE OR ASSERT ANY RIGHTS IN OR TO THE OWNERSHIP, REGISTRATION OR USE OF ANY TRADEMARK, SERVICE MARK, OR TRADE NAME, WHICH IS EI THER IN WHOLE OR IN PART, THE SAME AS OR CONFUSINGLY SIMILAR WITH TH E SAID TRADE MARK(S), OR.......... FROM THE ABOVE, IT IS CLEAR THAT NEITHER THE RPL EN JOYS EXCLUSIVE OWNERSHIP OVER THE RIGHTS REFERRED TO IN THE AGREEM ENT NOR THE SAME ARE ENJOYED BY THE RPL FOR AN INDEFINITE PERIOD. TH E AGREEMENT IS ONLY FOR THE TERM OF FIVE YEARS. HENCE NO ENDURING BENEFIT HAS BEEN TRANSFERRED BY THE ASSESSEE TO RPL. THE ASSESSEE I. E. THE LICENSOR STILL ENJOYS COMPLETE OWNERSHIP OF THE RIGHTS AS IS APPARENT FROM POINT-7 MENTIONED ABOVE. MERELY THE FACT THAT A LUM PSUM PAYMENT HAS BEEN RECEIVED BY THE ASSESSEE, ALTHOUGH ONLY FO R THE TENURE OF FIVE YEARS, DOES NOT MEAN THAT THE RECEIPT SHOULD B E TREATED AS CAPITAL IN THE HANDS OF THE ASSESSEE. IN ALL RESPEC TS THE RECEIPT IS IN THE NATURE OF REVENUE RECEIPT AND SHOULD HAVE BEEN OFFERED FOR TAXATION BY THE ASSESSEE. IN VIEW OF THE DISCUSSIONS AND REASONS CITED ABOVE, THE AMOUNT OF RS.5,25,00,000/-SHOWN BY THE ASSESSEE AS A CAPITAL RECEIPT IS BEING ADDED TO THE TOTAL INCOME OF THE ASSESSEE BY TREATI NG THE SAME AS REVENUE IN NATURE. (ADDITION RS. 5,25,00,000/-). 13. FROM THE ABOVE PARA OF THE ASSESSMENT ORDER, IT IS CLEARLY SEEN THAT THIS AMOUNT WAS BROUGHT TO TAX BY THE A.O. ON THIS BASIS THAT THE AGREEMENT IS ONLY FOR THE PERIOD OF 5 YEARS AND, TH EREFORE, NO ENDURING BENEFIT HAS BEEN TRANSFERRED BY THE ASSESSEE TO RPL AND, THEREFORE, THIS M.A.NO.166 /AHD/2012 9 ALLEGATION IN THE MISCELLANEOUS APPLICATION IS ALSO NOT CORRECT AND HENCE, REJECTED. 14. REGARDING OTHER ALLEGATION IN THE MISCELLANEOUS APPLICATION THAT MISTAKE IS THEREIN THE TRIBUNAL ORDER BY NOT FOLLOW ING THE DECISION OF SPECIAL BENCH OF THE TRIBUNAL RENDERED IN THE CASE OF SAURABH SRIVASTAVA (SUPRA) AND THE JUDGEMENT OF HONBLE APEX COURT REN DERED IN THE CASE OF GUFFE CHEM PVT. LTD. (SUPRA), WE FIND THAT THE BASI S IS GIVEN BY THE TRIBUNAL IN THE IMPUGNED ORDER FOR NOT FOLLOWING TH ESE JUDGEMENTS AND HOW THESE JUDGEMENTS ARE NOT APPLICABLE IN THE PRES ENT CASE AND THEREFORE, THERE IS NO APPARENT MISTAKE IN THE TRIBUNAL ORDER ON THIS ACCOUNT ALSO. 15. THE NEXT ALLEGATION IS THIS THAT THE TRIBUNAL H AS WRONGLY PROCEEDED ON THE BASIS THAT THE RECEIPT IS NOT ON ACCOUNT OF NON COMPETE FEE BUT IS ON ACCOUNT OF PROVIDING LICENSE TO RPL FOR EXTENSIVE U SE OF TRADE MARK ON YEARLY BASIS. THIS ALLEGATION IS ALSO NOT CORRECT AND THERE IS NO MISTAKE IN THE TRIBUNAL ORDER ON THIS ACCOUNT BECAUSE WE HAVE SEEN THAT AS PER CLAUSE (1) OF THE AGREEMENT AS AVAILABLE ON PAGE 3 OF THE PAPER BOOK, THE ASSESSEE HAS GRANTED EXTENSIVE USE OF THE TRADE MAR K RIGHT TO RPL FOR TERRITORY OF INDIA AND AS PER OTHER CLAUSES, THE AS SESSEE HAS AGREED FOR NOT COMPETING WITH RPL BUT THE FACT REMAINS THAT THE AM OUNT RECEIVED BY THE ASSESSEE IS FOR USE OF LICENSE BY RPL AND NOT FOR N ON COMPETITION. IF THE USE OF LICENSE IS NOT GIVEN TO RPL, WHERE IS THE QU ESTION OF COMPETING OR NON COMPETING. HENCE, THE RECEIPT IS FOR THE TRANS FER OF RIGHT TO RPL FOR USE OF TRADE MARK FOR A PERIOD OF 5 YEARS ONLY AND MERELY BECAUSE ALONG WITH THIS RIGHT GRANTED BY THE ASSESSEE TO RPL, THE ASSESSEE HAS ALSO AGREED FOR NON COMPETITION, IT CANNOT BE SAID THAT THE PRICE RECEIVED BY THE ASSESSEE IS FOR NON COMPETITION AND NOT FOR ALL OWING RPL THE RIGHT TO USE THE TRADE MARK MERELY BECAUSE OF THIS REASON T HAT IN THE AGREEMENT, THE WORDS ARE USED IN CLAUSE 12 THAT PRICE PAID IS TOWARDS TERRITORIAL NON M.A.NO.166 /AHD/2012 10 COMPETE RIGHTS GIVEN BY THE LICENSOR, IT CANNOT BE SAID THAT THIS PRICE IS FOR NON COMPETE RIGHT AND IT IS NOT FOR RIGHT TO US E THE TRADE MARK GIVEN BY THE ASSESSEE TO RPL BECAUSE THERE CANNOT BE ANY COM PETITION OR NON CO PETITION UNLESS THE RPL IS ALLOWED THE RIGHT TO USE THE TRADE MARK AND IT IS A FACT THAT THERE IS NO SEPARATE PRICE CHARGED FOR GRANTING USAGE OF TRADE MARK AND FOR GRANTING THE RIGHT OF NON COMPETITION. MOREOVER, THIS ASPECT IS DULY CONSIDERED BY THE TRIBUNAL IN THE IMPUGNED TRIBUNAL ORDER. THE TRIBUNAL HAS ALSO GIVEN EXAMPLE IN THIS REGARD ON P AGES 6-7 OF THE TRIBUNAL ORDER FOR COMING TO THIS CONCLUSION THAT T HE RECEIPT IN THE PRESENT CASE IS FOR GRANTING USE OF TRADE MARK AND NOT FOR NON COMPETE FEE AND HENCE, EVEN IF THERE IS MISTAKE IN THE TRIBUNAL ORD ER, IT IS NOT AN APPARENT MISTAKE WHICH CAN BE RECTIFIED U/S 254(2) OF THE IN COME TAX ACT, 1961. THIS ALLEGATION OF MISTAKE IS ALSO REJECTED. 16. AS PER ABOVE DISCUSSION, WE HAVE FOUND THAT THE RE IS NO APPARENT MISTAKE IN THE TRIBUNAL ORDER ON THIS ACCOUNT EXCEP T WRONG PRODUCTION OF GROUND NO.1 OF THE REVENUES APPEAL WHICH HAS ALREA DY BEEN RECTIFIED BY US AS PER PARA 2 ABOVE AND HENCE, ALL OTHER CONTENT IONS IN THE MISCELLANEOUS APPLICATION ARE REJECTED. 17. - REGARDING VARIOUS JUDGEMENTS CITED BY THE LD. A.R., WE FIND THAT THE JUDGEMENT OF HONBLE CALCUTTA HIGH COURT R ENDERED IN THE CASE OF HARI SHANKAR BHARTIA (SUPRA) IS NOT RELEVANT BE CAUSE IN THAT CASE, THE ISSUE BEFORE THE HONBLE HIGH COURT WAS THIS THAT W HETHER THE CLAIM OF NON COMPETITION FEE IS A GENUINE ONE OR NOT. UNDER THESE FACTS, IT WAS HELD BY THE HONBLE CALCUTTA HIGH COURT THAT SINCE THE A.O. HAD NOT QUESTIONED THE GENUINENESS OF AGREEMENT, IT CANNOT BE CLAIMED BEFORE THE TRIBUNAL BY THE REVENUE THAT THE CLAIM OF NON COMPE TITION FEE ARE NOT GENUINE ONE AND THE TRIBUNAL CANNOT ALLOW SUCH CLAI M OF THE REVENUE. IN THE PRESENT CASE, THIS IS NOT THE BASIS OF THE DECI SION OF THE TRIBUNAL THAT M.A.NO.166 /AHD/2012 11 THE AGREEMENT IS NOT GENUINE AND, THEREFORE, THIS J UDGEMENT OF HONBLE CALCUTTA HIGH COURT IS NOT APPLICABLE IN THE PRESEN T CASE. - THE 2 ND DECISION CITED BY THE LD. A.R. IS THE DECISION OF THE TRIBUNAL (MUMBAI BENCH) RENDERED IN THE CASE OF GOL DEN MEADOWS PROPERTIES (P) LTD. (SUPRA). IN THAT CASE ALSO THE ISSUE BEFORE THE TRIBUNAL WAS THAT WHETHER NON CONSIDERATION OF VITAL FACTS B ROUGHT ON RECORD OR ARGUMENTS MADE AND JUDICIAL DECISIONS CITED INDICAT ED AND ARGUMENTS OF THE APPELLANT WHICH ALSO GO TO THE ROOT OF THE MATT ER IS A MISTAKE APPARENT FROM RECORD. IN THE PRESENT CASE, WE HAVE SEEN THA T THERE IS NO OMISSION ON THE PART OF THE TRIBUNAL OF NOT CONSIDERING ANY VITAL FACT BROUGHT ON RECORD BY THE ASSESSEE OR OF ANY ARGUMENT OR OF ANY JUDICIAL DECISION CITED IN THE COURSE OF HEARING OF APPEAL AND HENCE, THIS JUDGEMENT IS ALSO OF NO HELP TO THE ASSESSEE IN THE PRESENT CASE. - THE 3 RD DECISION CITED BY THE LD. A.R. IS THE JUDGMENT OF HONBLE GUJARAT HIGH COURT RENDERED IN THE CASE OF CIT VS N IRANJAN K ZAVERI (SUPRA). IN THAT CASE, IT WAS FOUND BY THE TRIBUNA L THAT THE OBSERVATION/FINDING GIVEN BY THE TRIBUNAL IS EITHER BASED ON THE MATERIAL NOT BROUGHT ON RECORD OR THE MATERIAL ALREADY AVAIL ABLE HAS NOT BEEN PROPERLY APPRECIATED AND, THEREFORE, THE ORDER OF T HE TRIBUNAL HAS RESULTED IN GREAT INJUSTICE TO THE ASSESSEE ON ACCOUNT OF VA RIOUS UNINTENTIONAL MISTAKES IN THE ORDER. UNDER THESE FACTS, IT WAS H ELD BY THE HONBLE GUJARAT HIGH COURT THAT THE ORDER OF THE TRIBUNAL O F RECALLING THE ORIGINAL ORDER DOES NOT SUFFER FROM ANY LEGAL INFIRMITY. IN THE PRESENT CASE, WE HAVE SEEN THAT IT COULD NOT BE SHOWN BY THE ASSESSE E THAT THE TRIBUNAL HAS MADE SOME OBSERVATION/FINDING WHICH IS NOT BASED ON MATERIAL FACTS ON RECORD. IT COULD ALSO NOT BE SHOWN BY THE LD. A.R. THAT THE TRIBUNAL HAS NOT CONSIDERED ANY MATERIAL ALREADY AVAILABLE ON RE CORD. IN FACT, NO MISTAKE COULD BE ESTABLISHED BY THE LD. A.R. IN THE IMPUGNED TRIBUNAL M.A.NO.166 /AHD/2012 12 ORDER AND, THEREFORE, THIS JUDGEMENT OF HONBLE GUJ ARAT HIGH COURT IS ALSO NOT APPLICABLE IN THE PRESENT CASE. HENCE, EX CEPT THE FIRST MISTAKE POINTED OUT BY THE ASSESSEE THAT GROUND NO.1 OF THE REVENUES APPEAL IS WRONGLY REPRODUCED BY THE TRIBUNAL IN THE IMPUGNED TRIBUNAL ORDER WHICH HAS BEEN DULY RECTIFIED IN PARA 2 ABOVE, WE DO NOT FIND ANY MERIT IN ANY OTHER POINT RAISED BY THE ASSESSEE IN THE MISCELLAN EOUS APPLICATION AND HENCE, THE SAME ARE REJECTED. 18. IN THE RESULT, MISCELLANEOUS APPLICATION OF THE ASSESSEE IS PARTLY ALLOWED. 19. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED HEREINABOVE. SD./- SD./- (G. C. GUPTA) (A. K. GARODIA) VICE PRESIDENT ACCOUNTANT MEMBER SP COPY OF THE ORDER FORWARDED TO: 1. THE APPLICANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE LD. CIT (APPEALS) 5. THE DR, AHMEDABAD BY ORDER 6. THE GUARD FILE AR,ITAT,AHMEDABAD 1. DATE OF DICTATION 08/11/12 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 09/11/12.OTHER MEMBER 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P .S./P.S. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 30/11/2012 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. P.S./P.S.30/11 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 30/11/2012 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK .. 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER . 9. DATE OF DESPATCH OF THE ORDER. .