CANON INDIA PRIVATE LIMITED vs. DEPUTY COMMISSIONER OF INCOME TAX CIRCLE 3(1)

ITA/520/2013HC Delhi22 April 20152 pages

AI SummaryPartly Allowed

What did the High Court hold?

The High Court held that the specific issue concerning the treatment of distributor expenses was covered by its earlier decision in Sony Ericsson Mobile Communications India Pvt. Ltd. V. Commissioner of Income Tax (ITA No. 16/2014), decided on 16th March, 2015. In that decision, the Court had ruled in favour of the assessee. Therefore, the question of law was answered in favour of the assessee. The Court found the ITAT's reliance on its Special Bench ruling in LG Electronics India Pvt. Ltd. V. ACIT to be erroneous in light of the subsequent High Court precedent. The appeals were allowed, and the matter was remitted to the ITAT for consideration in accordance with the High Court's ruling. The operative direction was to remit the matter to the ITAT for further proceedings.

What were the facts?

The assessee, Canon India Private Limited, filed two appeals (ITA 520/2013 and ITA 523/2013) challenging a common order of the Income Tax Appellate Tribunal (ITAT) dated 03.05.2013. The appeals were preferred against the Deputy Commissioner of Income Tax, Circle 3(1). The core of the dispute concerned the ITAT's treatment of the assessee's distributor expenses. The ITAT had relied on its own Special Bench ruling in LG Electronics India Pvt. Ltd. V. ACIT. The High Court noted that a Division Bench ruling in Sony Ericsson Mobile Communications India Pvt. Ltd. V. Commissioner of Income Tax, decided on 16th March, 2015, covered the specific issue in favour of the assessee. Consequently, the matter was remitted back to the ITAT for further consideration.

What were the issues?

1. Whether the Income Tax Appellate Tribunal erred in its treatment of the assessee's distributor expenses, relying on its Special Bench ruling in LG Electronics India Pvt. Ltd. V. ACIT (ITA No. 5140/DEL/2011)? (Question of law) Assessee's Contention: The assessee contended that the ITAT's order was erroneous. The assessee relied on the subsequent decision of the Division Bench of the High Court in Sony Ericsson Mobile Communications India Pvt. Ltd. V. Commissioner of Income Tax (ITA No. 16/2014), which was decided on 16th March, 2015, and held the issue in favour of the assessee. Revenue's Contention: The judgment does not record any specific contentions made by the revenue on this issue.

AI-generated summary — verify with the full judgment below

$~40 & 41 * IN THE HIGH COURT OF DELHI AT NEW DELHI

+ ITA 520/2013 + ITA 523/2013

CANON INDIA PRIVATE LIMITED ..... Appellant Through Mr. Mukesh Butani, Mr. Vishal Kalra and Mr. Vrinda Tulshan, Advs.

versus

DEPUTY COMMISSIONER OF INCOME TAX CIRCLE 3(1) ..... Respondent Through Mr. N P Sahni, sr. standing counsel with Mr. Nitin Gulati, Adv.

CORAM: HON'BLE MR. JUSTICE S. RAVINDRA BHAT HON'BLE MR. JUSTICE R.K.GAUBA

O R D E R %

22.04.2015

In these two appeals, the common order of the ITAT dated 03.05.2013 is impugned by the assessee, who urges that the treatment of its distributor expenses by the ITAT was erroneous. The ITAT had relied upon its special bench ruling in LG Electronics India Pvt. Ltd. V. ACIT (ITA No. 5140/DEL/2011 reported in (2013) 152 TTJ (Del)(SB)273). In the light of the decision of the Division Bench of this Court in Sony Ericsson Mobile Communications India Pvt. Ltd. V. Commissioner of Income Tax (ITA No. 16/2014 decided on 16th March, 2015), the specific issue stands covered in favour of the assessee. The question of law accordingly is answered in This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 04/04/2026 at 22:03:47

favour of the assessee. The matter is consequently remitted to the ITAT for consideration. Parties shall appear before the ITAT on 10.07.2015. The appeals are allowed in the above terms.

S. RAVINDRA BHAT, J

R.K.GAUBA, J APRIL 22, 2015 vld This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 04/04/2026 at 22:03:47

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