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TMI Blog2014 (8) TMI 684X X X X Extracts X X X X X X X X Extracts X X X X ..... roperty tax – Held that:- The Tribunal was rightly of the view that the assessee had paid the property tax for the buildings which had been hired out to Liberty Shoes Ltd. and this fact had been admitted by the assessee - no evidence was that the properties were used for the purpose of the business of the assessee - There is no material to show that the assessee is the owner of the properties nor any such claim was made before us nor appears to have been made before the lower authorities – Decided against Assessee. - ITA No.112 of 2013 (O&M) - - - Dated:- 4-2-2014 - MR. AJAY KUMAR MITTAL AND MS. ANITA CHAUDHRY, JJ. Mr. S.K.Mukhi, Advocate for the appellant Mr. Yogesh Putney, Advocate for the respondent JUDGEMENT Ajay Kumar Mittal J.- 1. This order shall dispose of I. T. A. Nos. 112, 113, 115 and 116 as these appeals arise out of a consolidated order dated October 31, 2012. However, the facts are being extracted from I. T. A. No. 112 of 2013. 2. I. T. A. No. 112 of 2003 has been preferred by the assessee under section 260A of the Income-tax Act, 1961 (in short, the Act ), against the order dated October 31, 2012, annexure A.3 passed by the Income-tax A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d from outside parties and paying for job charges. On October 29, 2004, the assessee filed return of income for the assessment year 2004-05 declaring an income of ₹ 2,60,40,244 which was processed under section 143(1) of the Act on March 31, 2005. Notice under section 143(2) of the Act was issued on May 10, 2005. Up to the assessment year 2003-04, the firm was engaged in the business of trading of footwear and other goods. On March 31, 2003, the firm entered into franchise agreement with M/s. Liberty Shoe Ltd., Karnal, for a period of seven years. The agreement was effective with effect from April 1, 2003. Under the agreement, the appellant agreed that the brand name Liberty shall be available exclusively to M/s. Liberty Shoe Ltd., Karnal, and the trade marks can be used globally on and in connection with the goods manufactured or sold by or for M/s. Liberty Shoe Ltd., Karnal, in accordance with Liberty Footwear Co.'s minimum quality standards and manufacturing specifications. M/s. Liberty Shoe Ltd. agreed to pay licence fee as per terms. The Assessing Officer raised objections on certain issues. The appellant submitted that the expenses were incurred wholly and exclusive ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as well as the Tribunal had concurrently come to the conclusion that the expenses claimed in these appeals were not for business purposes and, therefore, the same had been rightly disallowed by the authorities below. 6. After hearing learned counsel for the parties, we do not find any merit in these appeals. 7. The findings of the Tribunal on each issue in these appeals may be noticed. I. T. A. No. 112 of 2013 8. With regard to advertisement and sales promotion expenses of ₹ 2,50,000, the Assessing Officer disallowed the same on the ground that no details had been filed by the assessee to justify that the expenses were incurred for the purpose of its business. The Commissioner of Income-tax (Appeals) upheld the said finding, which was affirmed by the Tribunal. 9. Disallowance of assets written off at ₹ 15,334 and receivables written off at ₹ 19,254 was made by the Assessing Officer on the ground that no proof had been furnished by the assessee. The Commissioner of Incometax (Appeals) confirmed the disallowance. The Tribunal while affirming the finding recorded as under : 15. We have heard both the parties and gone through the f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r expenses and advertisement expenses are identical as in I. T. A. No. 112 of 2013. However, disallowance of ₹ 3,00,844 in respect of legal expenses, the Assessing Officer held that the assessee had transferred all the rights of the trade mark to Liberty Shoes Ltd. and the expenses were to be borne by the company as per the agreement. The Commissioner of Income-tax (Appeals) upheld the disallowance which was affirmed by the Tribunal. I. T. A. No. 116 of 2013 13. In this appeal, with regard to the issue regarding disallowance of ₹ 69,955 on account of property tax paid, the Assessing Officer held that as the property was used by Liberty Shoes Ltd., it was the liability of the said company. The Commissioner of Income-tax (Appeals) confirmed the same on the ground that the assessee had paid the property tax for the buildings which had been hired out to Liberty Shoes Ltd. and this fact had been admitted by the assessee in its letter dated October 29, 2010/November 9, 2010, which was filed during the appeal proceedings for the assessment year 2004-05. The relevant finding of the Tribunal reads thus : 31. We have heard both the parties and gone through ..... X X X X Extracts X X X X X X X X Extracts X X X X
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