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Income Tax Appellate Tribunal, ‘D’ BENCH, CHENNAI
Before: SHRI N.R.S. GANESAN & SHRI RAMIT KOCHAR
आदेश /O R D E R
PER N.R.S. GANESAN, JUDICIAL MEMBER:
This appeal of the Revenue is directed against the order of the Commissioner of Income Tax (Appeals) -11, Chennai, dated 21.03.2019 and pertains to assessment year 2015-16.
The first issue arises for consideration is disallowance of logo charges paid at the rate of 0.5%.
Dr. M. Srinivasa Rao, the Ld. Departmental Representative, submitted that the assessee has paid 0.5% of the sales to its group concern for using the trade name and monogram. According to the Ld. D.R., this expenditure with regard to payment of logo charges is capital in nature, therefore, it cannot be allowed as revenue expenditure.
However, the CIT(Appeals) allowed the claim of the assessee by placing reliance on the order of this Tribunal in the assessee's own case.
According to the Ld. D.R., the Revenue has filed appeal before the High Court and the same is pending for adjudication, therefore, the CIT(Appeals) ought not to have followed the order of this Tribunal.
We heard Sh. R. Vijayaraghavan, the Ld.counsel for the assessee also. It is not in dispute that the logo charges paid by the assessee at the rate of 0.5% on the basis of the agreement was allowed as revenue expenditure by the order of this Tribunal for the earlier year.
The Revenue has already filed an appeal before the High Court and it is pending for adjudication. It is not the case of the Revenue that the order of this Tribunal was stayed by the High Court. In those circumstances, this Tribunal is of the considered opinion that in view of the decision of the co-ordinate Bench of this Tribunal in the assessee's own case for earlier assessment year, the payment of logo charges has to be allowed as revenue expenditure. A mere pending of appeal before the High Court cannot be a reason to take a different view. Therefore, this Tribunal do not find any reason to interfere with the order of the lower authority and accordingly the same is confirmed.
Now coming to the next issue of disallowance made by the Assessing Officer under Section 40A(2) of the Income-tax Act, 1961 (in short 'the Act') towards depot service charges.
Dr. M. Srinivasa Rao, the Ld. D.R. submitted that the CIT(Appeals) allowed the claim of the assessee on the ground that it was paid over and above the market rate to non-related parties. Even though a similar payment was allowed by this Tribunal for earlier assessment year, according to the Ld. D.R., an appeal was filed by the Revenue before the High Court and the same is pending before the High Court for adjudication.
We heard Sh. R. Vijayaraghavan, the Ld.counsel for the assessee, also. This Tribunal finds that a similar payment towards depot service charges was allowed by this Tribunal for earlier assessment year.
A mere pending of appeal against the order of this Tribunal before the High Court cannot be a reason to take a different view. Moreover, it is not the case of the Revenue that the order of this Tribunal was stayed by the High Court. In those circumstances, this Tribunal do not find any reason to interfere with the order of the lower authority and accordingly the same is confirmed.
In the result, the appeal filed by the Revenue is dismissed. 8.
Order pronounced in the court on 9th October, 2019 at Chennai.