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Income Tax Appellate Tribunal, MUMBAI BENCHES “I”, MUMBAI
Before: Shri JOGINDER SINGH, & Shri G. MANJUNATHA
आदेश / O R D E R
Per Joginder Singh (Judicial Member) The Revenue is aggrieved by the impugned order dated 15/06/2016 of the Ld. First Appellate Authority, Mumbai and the assessee has preferred cross objection.
We have considered the rival submissions and perused the material available on record. In the appeal of the Revenue, the first ground agitated by the Ld. DR is with respect to disallowance made under section 43B of the Income Tax Act, 1961 (hereinafter the Act) amounting to Rs.1,57,41,631/-. Before the Ld. Commissioner of Income Tax (Appeal), in its written submissions, the assessee claimed that the impugned amount was not debited to profit & loss account and further was not claimed as expenditure and thus cannot be added under section 43B
C.O. No.142/Mum/2016 M/s Murjani Retail Pvt. Ltd. of the Act. This fact was claimed to be expressly stated in the tax audit report at annexure-VII to clause 21(Business)(i) & (ii). This factual aspect was not controverted by the Revenue. There is uncontroverted finding in the impugned order that such expenses has not been claimed by the assessee, therefore, the addition was rightly deleted, consequently, we affirm the stand of the Ld. Commissioner of Income Tax (Appeal).
The next ground raised by the Revenue pertains to disallowance of sum of Rs.1,39,73,469/- on account of rent payment to M/s TAG Enterprises. The Ld. counsel for the assessee, before the Ld. Commissioner of Income Tax (Appeal), as well as before us, explained that the office space was shared between the assessee and its group affiliates as per clause -14 of the agreement on assignment.
As per this clause, an express permission was given by the licensor to the licensee to assign licensee’s rights to the listed specific affiliate which includes the assessee. Since, the office was utilized for business purposes, which is even not disputed by the Assessing Officer, pursuant to an C.O. No.142/Mum/2016 M/s Murjani Retail Pvt. Ltd. agreement and TDS was deducted under section 194-I as
per leave and license agreement dated 29/06/2007 entered between M/s TAG Enterprises and M/s Brnad Marketing India Pvt. Ltd., the licensor permitted the licensee M/s Brand Marketing India Ltd., the right to assign the premises as per clause-14 of the agreement, which has been reproduced in the impugned order and uncontroverted fact that above two group companies along with the assessee shared the premises and the rent/amenities, therefore, it is an allowable expenditure.
The stand of the Ld. Commissioner of Income Tax (Appeal) is affirmed.
So far as, the cross objection of the assessee is concerned, the crux of the argument on behalf of the assessee is that if the claim of the assessee is allowed and the appeal of the Revenue is dismissed, the cross objection of the assessee will become in-fructuous. In view of the above, since, the stand taken by the Ld. Commissioner of Income Tax (Appeal), is affirmed, the cross objection of the C.O. No.142/Mum/2016 M/s Murjani Retail Pvt. Ltd. assessee has become in-fructuous, consequently, dismissed.
Finally, the appeal of the Revenue as well as the cross objection of the assessee are dismissed.
This Order was pronounced in the open court in the presence of ld. representatives from both sides at the conclusion of the hearing on 05/06/2018.