DDIT (IT) 4(1), V. MARRIOTT INTERNAITONAL LICENSING COMPANY BV,

MA 444/MUM/2013

• Counselvise Citation: [2014] 124 COUNSELVISE.COM (IT) 1900 (ITAT-MUMBAI)
• Duration Of Justice: 3 month(s) 23 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 02-04-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: L
• Assessment Year: 2007-2008
• Appeal Filed On: 10-12-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R S SRIVASTAV

Judgement Text

, L IN THE INCOME TAX APPELLATE TRIBUNAL L BENCH, MUMBAI . . , !' BFORE SHRI N.K. BILLAIYA, AM AND , !' SHRI VIVEK VARMA, JUDICIAL MEMBER M.A. NO. 444/MUM/2013 (ARISING OUT OF I.T.A. NO. 2083/MUM/2011) ( # # # # / ASSESSMENT YEAR : 2007-08 DY.DIRECTOR OF INCOME TAX (INTERNATIONAL TAXATION)-4(1), 133, SCINDIA HOUSE, BALLARD PIER, MUMBAI 400 038 / VS. M/S. MARRIOT INTERNATIONAL LICENSING CO BV, C/O. BMR & ASSOCIATES, 3F, CONTRACTOR BLDG., 41, R.KAMANI MARG, '$ ./ %& ./ PAN/GIR NO. AADCM 0918R APPLICANT ) .. RESPONDENT ) APPLICANT BY: SHRI R.S.SRIVASTAV RESPONDENT BY SHRI NIRAJ SHETH ' () / DATE OF HEARING : 21.03.2014 *+# ' () /DATE OF PRONOUNCEMENT : 02.04.2014 !, / O R D E R PER N.K. BILLAIYA, AM: THIS MISCELLANEOUS APPLICATION UNDER SECTION 254(2 ) OF THE INCOME TAX ACT, 1961(THE ACT) IS BY THE REVENUE ARISING OU T OF THE ORDER OF THE TRIBUNAL IN ITA NO.2083/MUM/2011 DATED 29/11/2013. THE REVENUE SAYS THAT BECAUSE OF THE FOLLOWING THERE IS AN ER ROR IN THE ORDER OF THE TRIBUNAL WHICH DESERVES TO BE RECTIFIED. THEREFORE, THE TOTAL IMPUGNED RECEIPTS ARE LIABLE TO BE CONSIDERED IN TERMS OF ARTICLE 7 M.A. NO. 444/MUM/2013 2 INSTEAD, THE TRIBUNAL SHOULD HAVE HELD THAT THE IMP UGNED RECEIPTS AS PER CLAUSE 3.2 & 3.3 OF THE AGREEMENT ARE LIABLE TO BE CONSIDERED IN TERMS OF ARTICLE 7. 2. WE HAVE CAREFULLY PERUSED THE ORDER OF THE TRIBU NAL IN THE LIGHT OF THE ABOVE OBSERVATIONS MADE BY THE REVENUE IN ITS MISC ELLANEOUS APPLICATION. IT IS TRUE THAT THE TRIBUNAL HAS FOLLOWED THE ORDER OF THE CO-ORDINATE BENCH IN THE CASE OF THE ASSESSEE FOR ASSESSMENT YEAR 20 04-05. THE RELEVANT PART OF THE SAID ORDER OF THE TRIBUNAL IS AT PARA-5 ON P AGE-5 OF ITS ORDER WHICH READS AS UNDER: 5. IN THE FIRST APPEAL, THE LD. CIT(A) NOTICED THAT THE AMOUNT OF RS.90.06 LACS WAS ON ACCOUNT OF PAYMENT RECEIVED UNDER CLAUSES 3. 1 TO 3.3 OF THE AGREEMENT. THE FIRST PART OF THE AMOUNT, BEING THE RECEIPT UNDER CLAUSE 3.1 OF THE AGREEMENT WAS HELD TO BE ROYALTY AND THE SECOND PART OF THE AMOUNT UNDER CLAUSES 3.2 AND 3.3 WAS HELD TO BE TOWARDS R EIMBURSEMENT OF EXPENSES ON SALES PROMOTIONS AND MARKETING AND HEN CE NOT CHARGEABLE TO TAX IN INDIA. THE REVENUE IS IN APPEAL AGAINST THE DIR ECTION OF THE LD. CIT(A) IN RELATION TO THE PAYMENT MADE UNDER CLAUSES 3.2 AND 3.3 OF THE AGREEMENT TREATING IT AS REIMBURSEMENT OF EXPENSES AND NOT ROYALTY. THE LD. AR FAIRLY CONCEDED THAT THE IMPUGNED ORDER IN DIRECTING TO TA X THE RECEIPT UNDER CLAUSE 3.1 .OF THE AGREEMENT AS ROYALTY HAS BEEN ACCEPTE D BY THE ASSESSEE. WE ARE, THEREFORE, REQUIRED TO ADJUDICATE UPON THE NATURE O F RECEIPT UNDER CLAUSES 3.2 AND 3.3 OF THE AGREEMENT. IT CAN BE SEEN THAT RECEIPT UNDER CLAUSE 3.1 OF TH E AGREEMENT WAS NEVER UNDER CONSIDERATION BEFORE THE TRIBUNAL IN ASSESSM ENT YEAR 2004-05 BECAUSE THE ASSESSEE HAD ACCEPTED THE SAME AS ROYAL TY. THE TRIBUNAL WAS REQUIRED TO ADJUDICATE UPON THE NATURE OF RECEIPT UNDER 3.2 AND 3.3 OF THE AGREEMENT AND SINCE IN THE PRESENT CASE THE TRIBUN AL HAS FOLLOWED THE FINDING OF THE CO-ORDINATE BENCH IN A.Y 2004-05 IN TOTO, THEREFORE, THERE IS NO MISTAKE APPARENT FROM RECORD WHICH NEEDS RECTIF ICATION. ACCORDINGLY, THIS MISCELLANEOUS APPLICATION IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT AT THE TIME OF H EARING ON 02.04.2014 SD/- SD/- ( / VIVEK VARMA) ( . . / N.K. BILLAIYA) !' /JUDICIAL MEMBER !' / ACCOUNTANT MEMBER MUMBAI; -! DATED 02.04.2014 M.A. NO. 444/MUM/2013 3 . . ./ VM , SR. PS !, ' .( /#( / COPY OF THE ORDER FORWARDED TO : 1. $0 / THE APPELLANT 2. .1$0 / THE RESPONDENT. 3. 2 ( ) / THE CIT(A)- 4. 2 / CIT 5. 34 .( , , / DR, ITAT, MUMBAI 6. 45 6 / GUARD FILE. !, / BY ORDER, 1( .( //TRUE COPY// 7 / 8 % DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI