TIGRE SAS LIQUORS INDIA PVT. LTD.,NEW DELHI V. DCIT, CIRCLE-25(1), NEW DELHI

MA 382/DEL/2025

AI Insights

The case involves Tigre SAS Liquors India Pvt. Ltd., which appealed against the decision of the Deputy Commissioner of Income Tax (DCIT) regarding the classification of certain legal and professional expenses as capital in nature. The expenses included Rs. 35,52,173 for trademark registration and Rs. 4,77,794 for label registration charges. The ITAT initially upheld the DCIT's decision, classifying these expenses as capital in nature based on Section 32(1)(ii) of the Income Tax Act, 1961. However, upon reviewing the application under Section 254(2) of the Income Tax Act, 1961, the ITAT found that the earlier decision did not consider the binding precedent set by the Supreme Court in Commissioner of Income-tax vs. Finlay Mills Ltd, which could influence the classification of such expenses as revenue expenditures.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 837999 (ITAT-DELHI)
• Duration Of Justice: 4 month(s) 11 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 18-02-2026
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Assessment Year: 2013-2014
• Appeal Filed On: 07-10-2025
• Other Referred Cases: Commissioner of Income-tax vs. Finlay Mills Ltd [1951| 20 ITR 475 (SC)], ACIT vs. Saurashtra Kutch Stock Exchange Ltd. (2008) 305 ITR 227 (SC)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANKUSH KALRA
• Assessee Lawyers: VINOD BINDAL
• Keywords: Revenue expenditure; Capital expenditure

Judgement Text

"P a g e | 1 MA Nos. 382 & 383/Del/2025 Tigre SAS Liquors India Pvt. ld. (AY: 2013-14 & 2014-15) IN THE INCOME TAX APPELLATE TRIBUNAL “F” BENCH, DELHI BEFORE SHRI ANUBHAV SHARMA, JUDICIAL MEMBER & SHRI MANISH AGARWAL, ACCOUNTANT MEMBER M.A. Nos.382 & 383/Del/2025 Arising out of ITA Nos.7968 & 7969/Del/2018 (Assessment Years: 2013-14 & 2014-15) Tigre SAS liquors India Pvt. Ltd., 406, 4th Floor, Elegance Tower, Jasola, New Delhi – 25 Vs. DCIT, Circle-25(1) New Delhi \u0001थायीलेखासं./जीआइआरसं./PAN/GIR No: AAECT2925Q Appellant .. Respondent Appellant by : Sh. VinodBindal, Ms.Rinki Sharma, ITP Respondent by : Ms.AnkushKalra, Sr. DR Date of Hearing 09.01.2026 Date of Pronouncement 18.02.2026 O R D E R PER ANUBHAV SHARMA, JM: On hearing both sides we find that that the application in hand have been filed u/s 254(2) of the Income Tax Act, 1961 on the basis that the Printed from counselvise.com P a g e | 2 MA Nos. 382 & 383/Del/2025 Tigre SAS Liquors India Pvt. ld. (AY: 2013-14 & 2014-15) grounds no. 2 & 3 raised by the Appellant in ITA No. 7969/Del/2018 (AY2014-15) was against confirming the ad-hoc disallowance on account of legal and professional expenses amounting to Rs. 35,52,173/- on account of legal expenditure incurred towards registration of trade mark and Rs. 4,77,794/- towards label registration charges, considering the same as intangible asset being capital in nature. 2. The Hon'ble Bench was pleased to reject these grounds vide Para 4 of the order, holding that; \"We note that expenditure of Rs. 35,52,173/-incurred by the assessee are on account of legal expenditure. We note that the assessee company incurred amounting to Rs. 47,36,231/- which the assessee claims to be revenue expenditure, and thus, had claimed the deduction of the same in its statement of profit and loss and further theassessee had also incurred Rs.6,37,058/- towards label registration charges for the same brand. In fact, as per Section 32(1)(ii) expenditure for trade-mark/copy right, license, franchise are to be treated as capital in nature. Therefore, we do not find any reason to interfere in the finding given by the Printed from counselvise.com P a g e | 3 MA Nos. 382 & 383/Del/2025 Tigre SAS Liquors India Pvt. ld. (AY: 2013-14 & 2014-15) CIT(A) on this issue, thus assessee appeal on these issues is dismissed.” 3. Similarly, The Hon'ble Bench rejected ground number 2 of the ITA No.7968/Del/2018 for A.Y. 2013-14 vide para 13 holding that “We note that in view of Section 32(1)(ii) expenditure for trade- mark/copy right, license, franchise are to be treated as capital in nature. Therefore, we do not find any reason to interfere in the finding given by the CIT(A) on this issue, thus assessee appeal on this issue is dismissed\". 4. It is submitted by ld. Counsel that thesefindings are contrary to the decision of the Hon'ble Supreme Court in Commissioner of Income-tax vs. Finlay Mills Ltd [1951| 20 ITR 475 (SC) [01-10-1951]. The Apex Court held that’ \"The contention of the revenue was fallacious. The machinery which acquires a greater productive capacity by reason of its improvement by inclusion of some new invention naturallybecomes a new and altered asset by that process. So long as the machinery lasts, the improvement continues to the advantage of the owner of the machinery. The replacement of a dilapidated roof by a more substantial roof stands on Printed from counselvise.com P a g e | 4 MA Nos. 382 & 383/Del/2025 Tigre SAS Liquors India Pvt. ld. (AY: 2013-14 & 2014-15) the same footing. The result however of the Trade Marks Act is only two-fold. By registration, the owner is absolved from the obligation to prove his ownership of the trade mark. It is treated as prima facie proved on production of the registration certificate. It thus merely saves him the trouble of leading evidence, in the event of a suit, in a court of law, to prove his title to the trade mark. The registration is in the nature of collateral security furnishing the trader with a cheaper and more direct remedy against infringers. This is neither an asset nor an advantage so as to make payment for its registration a capital expenditure. The advantage derived by the owner of the trade mark by registration falls within class of revenue expenditure. The fact that a trade mark after registration could be separately assigned, and not as a part of the goodwill of the business only, does not also make the expenditure for registration a capital expenditure. That is only an additional and incidental facility given to the owner of the trade mark. It adds nothing to the trade mark itself.” 5. We are of the considered view that order as passed is established to be passed without taking into consideration the relevant and binding precedent, which though not cited at time of hearing, were there in favour of assesse. In ACIT vs. Saurashtra Kutch Stock Exchange Ltd. (2008) 305 ITR 227 (SC), the Supreme Court ruled that non-consideration of a binding decision of the Printed from counselvise.com P a g e | 5 MA Nos. 382 & 383/Del/2025 Tigre SAS Liquors India Pvt. ld. (AY: 2013-14 & 2014-15) Jurisdictional High Court or the Supreme Court by the ITAT constitutes a \"mistake apparent from the record\". Such an error is rectifiable under Section 254(2) of the Income Tax Act. Thus no consideration of binding judicial precedents is an error apparent fromrecord, accordingly, we recall the order dated 28.08.2025, to the limited extent of fresh adjudication of aforesaid grounds in both the appeals. 6. In aforesaid terms the application is allowed. Order pronounced in the open court on 18.02.2026 Sd/- (Manish Agarwal) Sd/- (Anubhav Sharma) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated 18.02.2026 Rohit, Sr. PS Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI Printed from counselvise.com "