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Income Tax Appellate Tribunal, ‘ C’ BENCH : CHENNAI
Before: SHRI GEORGE MATHAN & SHRI RAMIT KOCHAR
आदेश / O R D E R
PER GEORGE MATHAN, JUDICIAL MEMBER
Revenue, namely, Shriram Transport Finance Co., Limited, against the Order of the Commissioner of Income Tax (Appeals)-15, Chennai, in ITA No.200/2018-19/C.I.T(A)-15 dated 24.04.209 for assessment year 2016-17, is an appeal filed by the Revenue, namely, Shriram City Union Finance Limited, against the Order of the Commissioner of Income Tax (Appeals)-15, Chennai, in ITA No.176/2018-19/C.I.T(A)-15 dated 29.04.209 for assessment year 2016-17.
As the issues in all these appeals of the Revenue are identical, all these appeals are disposed of by this common order.
Mr.J.Pavithran Kumar represented on behalf of the Revenue and Mr.S.Gautam represented on behalf of the Assessee.
The sole issue raised in the appeals of Revenue in & ITA No.2009/Chny/2019 is against the action of the ld.CIT(A) in deleting the disallowance made by the Assessing Officer in respect of “Royalty Payments” by relying upon the decision of the Co-ordinate Bench of this Tribunal in assessee’s own case. ,2009 /Chny/19 :- 3 -:
It was submitted by ld.DR that the issue of royalty, though decided in favour of assessees in their respective case by the Co-ordinate Bench of this Tribunal, however, the Revenue has not accepted the decisions of the Tribunal and the order of the ld. CIT(A) is liable to be reversed as the order of the Tribunal in each of assessee’s own case has been challenged before the Hon’ble Jurisdictional High Court u/s.260A of the Act.
In reply, it was submitted by ld.AR that ld.CIT(A) had followed the decision of the Co-ordinate Bench of this Tribunal in assessee’s own case in their respective case. The ld.AR placed before us a copy of the order of Co-ordinate Bench of this Tribunal in the case of DCIT Vs. M/s.Shriram Transport Finance Co. Ltd., for assessment year 2014-15 in dated 24.05.2018, wherein the Tribunal has held as under:-
“4. We heard Shri Sailendra Mamidi, the ld.Departmental Representative and Shri R.Sivaraman, the ld.counsel for the assessee. It was brought to the notice of the Bench that a similar royalty paid by the assessee was considered by this Tribunal for assessment year 2012-13 in ITA No.728/Mds./2016, a copy of which is available at page 32 of the paper-book and found that the payment was made for the right to use the Logo, hence it has to be allowed as revenue expenditure. In view of the order of this ,2009 /Chny/19 :- 4 -:
Tribunal for assessment year 2012-13 in the assessee’s own case, this Tribunal do not find any reason to interfere with the order of the lower authority and accordingly the same is confirmed.”
We have heard the rival contentions and perused the material available on record. A perusal of the order of the Tribunal dated 24.05.2018 referred to supra shows that the Tribunal has followed the decision of the Co-ordinate Bench of the Tribunal in ITA No.728/Mds./2016 for assessment year 2012-13. The relevant portion of Revenue’s appeal in dated 24.08.2016 for assessment year 2012-13 in the case of M/s Shriram Transport Finance Co. Ltd., is extracted as under:-
The next ground of appeal is with regard to addition made on account of royalty to the extent of Rs.13,75,69,684/-.
27. Dr. U. Anjaneyalu, the Ld. Departmental Representative, submitted that the Assessing Officer made an addition of Rs.15,72,22,496/- paid to Shriram Ownership Trust. The Assessing Officer treated the same as capital expenditure and allowed depreciation at the rate of 12.5%. According to the Ld. D.R., the payment made to Shriram Ownership Trust towards royalty is nothing but a capital expenditure, therefore, the Assessing Officer has rightly allowed depreciation. Hence, according to the Ld. D.R., the CIT(Appeals) is not justified in deleting the addition made by the Assessing Officer.
On the contrary, Shri R. Sivaraman, the Ld.counsel for the assessee, submitted that the assessee-Trust was using Logo of ,2009 /Chny/19 :- 5 -:
Shriram Ownership Trust for its business and paid royalty. According to the Ld. counsel, Shriram Ownership Trust is a separate entity. For using its Logo in the business of the assessee, a payment needs to be made and the assessee is not purchasing the Logo. What was obtained by the assessee is only the right to use Logo. Therefore, according to the Ld. counsel, it cannot be treated as capital expenditure.
We have considered the rival submissions on either side and perused the relevant material available on record. What was paid by the assessee is for the right to use the Logo belonging to Shriram Ownership Trust. When the assessee made payment for use of right, this Tribunal is of the considered opinion that the same cannot be treated as capital expenditure. Therefore, the CIT(Appeals) has rightly found that the payment made by the assessee is in the revenue field. In fact, similar addition made by the Assessing Officer for the assessment year 2002-03 was deleted by this Tribunal. The CIT(Appeals) by placing reliance on the order of this Tribunal in Shriram Tamil Nadu Pvt. Ltd., allowed the claim of the assessee. Therefore, this Tribunal do not find any reason to interfere with the order of the lower authority and accordingly the same is confirmed.
As it is noticed that the issue in the Revenue’s appeals is now squarely covered by the decision of the Tribunal in assessee’s own case for the earlier assessment years, respectively following the decision of the Co-ordinate Bench of the Tribunal, the findings of the ld.CIT(A) on this issue is confirmed. ,2009 /Chny/19 :- 6 -:
In the result, both the appeals of Revenue in & 2009/Chny/2019 stand dismissed.
Order pronounced in the open court after conclusion of hearing on 22nd October, 2019, at Chennai.