2014 (10) TMI 360 - HC - Income Tax

Maintainability of appeal - Bar of limitation Trademarks acquired by assessee or not Held that - There is an agreement under which M/s.Godrej Soaps Ltd. allowed the Assessee the use of its trade mark for seven years - the tribunal noted that the trade marks have not been acquired by the assessee - There is what is termed as registered user agreement - the rights conferred have been looked as inconclusive and enduring in nature, that the findings of facts rendered by the tribunal cannot be termed as perverse - AO has erroneously assumed that the trade mark has been acquired by the assessee by the arrangement brought to his notice - the tribunal did not committed any error in following the principle of consistency and applying its earlier view no substantial question of law arises for consideration Decided against revenue.

Summary

Issues:
Challenge to order of Income Tax Appellate Tribunal dated 29th July, 2011; Maintainability of present appeal; Dismissal of appeals on technical grounds; Interpretation of agreement between parties regarding trademark rights; Application of principle of consistency by tribunal in relation to earlier assessment years.

Analysis:
The appeal challenges the order of the Income Tax Appellate Tribunal dated 29th July, 2011. The Respondent raises an objection to the maintainability of the appeal, arguing that the questions raised were already subject to a substantive appeal before the Court in earlier cases. These appeals were dismissed by the Court due to being barred by limitation. Despite the Supreme Court granting liberty to the department to review the order, the review petitions were not pursued. The Court notes that the appeals were dismissed not on merits but on technical grounds, and therefore, the present appeal is maintainable.

Regarding the interpretation of the agreement between the parties concerning trademark rights, the Tribunal reversed the findings of the Joint Commissioner after examining the agreement between the parties. The agreement allowed the Assessee to use the trade mark of M/s. Godrej Soaps Ltd. for seven years under specific conditions. The Tribunal concluded that the trade marks were not acquired by the Assessee but were used under a registered user agreement for a limited period and fee. The Tribunal's findings were based on a comprehensive analysis of the arrangement and cannot be considered erroneous or perverse. Thus, the first question raised cannot be deemed a substantial question of law.

In relation to the second and third questions, the Tribunal referred to facts from earlier assessment years and found no distinguishing features to deviate from its earlier view. The Tribunal applied the principle of consistency and upheld its previous findings, as the Revenue failed to present any new evidence. Consequently, even these questions were not considered substantial questions of law. The appeal was ultimately dismissed as it did not raise any substantial questions of law, and no costs were awarded.