THE COMMISSIONER OF INCOME vs. M/S REDINGTON (INDIA) LTD

PDF · subscribers
TCA/552/2016HC Madras26 July 2021Bench: Hon`ble Mr Justice M.DURAISWAMY6 pages
AI SummaryWithdrawn

What did the High Court hold?

The High Court did not decide the substantial questions of law. The Court noted the enactment of the Direct Tax Vivad Se Vishwas Act, 2020, and the assessee's participation in the scheme. The learned counsel for the respondent/assessee submitted that the assessee had availed the Vivad Se Vishwas Scheme and had been issued Form-5 on May 6, 2021. Recording this submission, the High Court held that nothing further survived for adjudication in the appeal. Therefore, the Tax Case Appeal was disposed of. The specific findings of the ITAT on the trademark license fee, bank guarantees, and depreciation on temporary structures were not reviewed or affirmed by the High Court. No issue was expressly left undecided, as the appeal was disposed of on procedural grounds.

What were the facts?

The Revenue, Commissioner of Income Tax, Chennai, filed an appeal under Section 260A of the Income Tax Act, 1961, against an order dated September 11, 2015, passed by the Income Tax Appellate Tribunal (ITAT), Chennai "D" Bench. The appeal pertains to assessment year 2007-08 and challenges the ITAT's decision in M.P.No.104/Mds/2015 in I.T.A.No.1743/Mds/2011. The High Court admitted the appeal on substantial questions of law. During the pendency of the appeal, the Direct Tax Vivad Se Vishwas Act, 2020, was enacted. The assessee, M/s. Redington (India) Ltd., availed the Vivad Se Vishwas Scheme and was issued Form-5 on May 6, 2021.

What were the issues?

The High Court was to decide five substantial questions of law: 1. Whether the Tribunal was correct in allowing the assessee's claim for trademark license fees paid to its Associate Enterprise (AE) when the AE was not the registered owner of the trademark. 2. Whether the Tribunal's allowance of the trademark claim was proper, given the assessee used the trademark since 1993 while the AE was formed only in 2005. 3. Whether the Tribunal's deletion of additions made for corporate bank guarantees given by the assessee to its AEs was proper, on the ground that it was not an international taxation issue. 4. Whether the Tribunal's holding that it was not an international transaction was perverse, considering Section 92B of the Income Tax Act, as amended by the Finance Act, 2012, included guarantees as international taxation. 5. Whether the Tribunal was correct in allowing 100% depreciation on temporary structures, contrary to the consistent decision of 10% for the earlier assessment year 2006-07 in the assessee's own case. The Revenue argued that the AE was not the registered owner of the trademark and that the formation date of the AE was subsequent to the assessee's use of the trademark. The Revenue also contended that guarantees should be considered international transactions under Section 92B and that the depreciation claim on temporary structures violated the rule of consistency. The judgment records no specific arguments from the assessee on these points.

Which sections of the Income-tax Act were involved?

Section 260A,Section 92B

AI-generated summary — verify with the full judgment below

Tax Case Appeal No.552 of 2016 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 26.07.2021 CORAM THE HON'BLE MR.JUSTICE M. DURAISWAMY AND THE HON'BLE MRS.JUSTICE R. HEMALATHA Tax Case Appeal No.552 of 2016 The Commissioner of Income Tax, Chennai. ... Appellant Vs. M/s.Redington (India) Ltd., SPL Guindy House, 95 Mount Road, Guindy, Chennai – 600 032.

... Respondent

Tax Case Appeal filed under Section 260A of the Income Tax Act, 1961 against the order of the Income Tax Appellate Tribunal, Chennai "D" Bench, dated 11.09.2015 passed in M.P.No.104/Mds/2015 in I.T.A.No.1743/Mds/2011. For Appellant : Mr.T.Ravikumar Senior Standing Counsel

For Respondent : Mr.R.Venkat Narayanan for M/s.Subbaraya Aiyar Padmanabhan Page 1/6 https://www.mhc.tn.gov.in/judis/ Tax Case Appeal No.552 of 2016 J U D G M E N T (Delivered by M.DURAISWAMY, J.) This appeal filed by the Revenue under Section 260A of the Income Tax Act, 1961 ('the Act' for brevity), is directed against the order dated 11.09.2015 passed by the Income Tax Appellate Tribunal, Chennai "D" Bench, ('the Tribunal' for brevity) in M.P.No.104/Mds/2015 in I.T.A.No.1743/Mds/2011 for the assessment year 2007-08. The above appeal has been admitted on the following Substantial Questions of Law: "1.Whether on the facts and in the circumstances of the case, the Tribunal was right in allowing the claim of the assessee in relation to trade mark, license fee paid to its Associate Enterprise especially when the AE were not the registered owner of the trade mark? 2.Is not the finding of the Tribunal bad in allowing the claim relating to trade marks especially when assessee has been using the same from 1993 onwards while so the Associated Enterprise were formed only in the year 2005? 3.Whether the finding of the Tribunal is proper by deleting the additions made on account of corporate Bank guarantee given by the assessee to its AEs on the ground that it is not an international taxation? Page 2/6 https://www.mhc.tn.gov.in/judis/ Tax Case Appeal No.552 of 2016 4.Is not the finding of the Tribunal perverse by holding that it is not an international transaction when Section 92 B of the Income Tax Act which had been amended by Finance Act, 2012 with effect from 01.04.2012 included guarantee as an international taxation? 5.Whether the Tribunal was right in holding that the depreciation on temporary structure is to be allowed at 100% when the same issue for the earlier year was decided at 10% only in the assessee's own case for the assessment year 2006-07 which is against the rule of consistency?” 2. We have heard Mr.T.Ravikumar, learned Senior Standing Counsel for the appellant/Revenue and Mr.R.Venkat Narayanan for M/s.Subbaraya Aiyar Padmanabhan, learned counsel for the respondent/assessee. 3. It may not be necessary for this Court to decide the Substantial Questions of Law framed for consideration on account of certain subsequent developments. The Government of India enacted the Direct Tax Vivad Se Vishwas Act, 2020 (Act 3 of 2020) to provide for resolution of disputed tax and for matters connected therewith or Page 3/6 https://www.mhc.tn.gov.in/judis/ Tax Case Appeal No.552 of 2016 incidental thereto. The Act of the Parliament received the assent of the President on 17th March 2020 and published in the Gazette of India on 17th March 2020. 4.Learned counsel for the respondent/assessee submitted that the assessee had availed the Vivad Se Vishwas Scheme and that the respondent/assessee had already been issued with Form–5 on 06.05.2021.

5.Since the respondent/assessee had been issued with Form-5, nothing survives for adjudication in the above appeal. Recording the submission made by the learned counsel for the respondent/assessee, the Tax Case Appeal stands disposed of. No costs. [M.D., J.] [R.H., J.] 26.07.2021

Index : Yes/No

Internet : Yes

mkn Page 4/6 https://www.mhc.tn.gov.in/judis/ Tax Case Appeal No.552 of 2016 To 1. Income Tax Appellate Tribunal, Chennai "D" Bench 2.The Commissioner of Income Tax, Chennai. Page 5/6 https://www.mhc.tn.gov.in/judis/ Tax Case Appeal No.552 of 2016 M. DURAISWAMY, J. and R. HEMALATHA, J. mkn Tax Case Appeal No.552 of 2016

26.07.2021 Page 6/6 https://www.mhc.tn.gov.in/judis/

More judgments on Section 92B

All 1,158 judgments and leading authorities on Section 92B →

Recent GST High Court judgments

Search GST case law →