DCIT, CHENNAI vs. M/S. SHRIRAM FINANCIAL PRODUCTS SOLUTION (CHENNAI) PVT.LTD., CHENNAI

This appeal of the Revenue is directed against the order of the Commissioner of Income Tax (Appeals) – 15, Chennai, dated 27.06.2016 and pertains to assessment year 2013-14.

The only issue arises for consideration is with regard to addition of `48,34,765/-, towards royalty payment.

Ms. H. Kabila, the Ld. Departmental Representative, submitted that the assessee paid and obtained enduring benefit on an intangible asset, therefore, the royalty payment is capital expenditure. Referring to the order of this Tribunal for assessment year 2012-13 in the assessee's own case, the Ld. D.R. submitted that the order of this Tribunal has not become final and the appeal filed by the Revenue is pending before the High Court. Therefore, the CIT(Appeals) is not justified in allowing the claim of the assessee on following the order of this Tribunal.

We have heard Shri A.N.R. Jayaprathap, the Ld. counsel for the assessee also. Admittedly, the assessee has paid royalty for using logo which belongs to Shriram Ownership Trust. In fact, a similar claim of the assessee was allowed in the assessee's own case by this Tribunal for assessment year 2012-13. The CIT(Appeals) allowed the claim of the assessee by placing reliance on the order of this Tribunal. Now an appeal has been filed before this Tribunal only on the ground that the appeal filed by the Revenue is pending before the High Court. It is not the case of the Revenue that the High Court stayed operation of the order of this Tribunal. Mere pending of appeal before High Court cannot be a reason to take a different view. Since identical payment was allowed for assessment year 2012-13 by this Tribunal, this Tribunal do not find any reason to interfere with the order of the lower authority and the same is confirmed.

In the result, the appeal filed by the Revenue is dismissed.