2010 (6) TMI 903 - AT - Income Tax

Summary

Issues involved: Challenge to the action of the ld. CIT(A) regarding the taxability of marketing contribution and reservation assessment fees received by the assessee.

Summary:
The appeal was filed by the Revenue against the order of ld. CIT (A)-V(2)(2), Mumbai dated 15.12.2006, challenging the tax treatment of marketing contribution and reservation assessment fees received by the assessee. The Tribunal observed that the relief granted by the ld. CIT(A) was based on a previous decision in the assessee's favor for A.Y. 1997-98. The Tribunal noted that the receipts were not unfettered and were received with an obligation to use them for specific purposes, akin to trust money. The Tribunal held that these receipts were not taxable as royalty or fees for technical services. A subsequent order for A.Y. 1998-99, 1999-2000 & 2001-02 directed the A.O. to re-examine the issue, considering the specific details of receipt and payment for all three assessment years. The Tribunal upheld the relevance of this order in determining the nature of the receipts. Consequently, the impugned order was set aside, and the issue was remanded to the A.O. for fresh consideration in line with the previous directive.

In conclusion, the appeal of the Revenue was treated as allowed for statistical purposes, and the issue was remanded to the A.O. for fresh adjudication in accordance with the Tribunal's directions.