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TMI Blog2016 (6) TMI 169X X X X Extracts X X X X X X X X Extracts X X X X ..... ceipt and all other relevant documents in connection with the payment of ₹ 25 lacs to Global Vipassana Foundation to substantiate its claim before the learned CIT(A) for examination and verification by the authorities below as per the mandate of the Act and the Rules made thereof. - Matter remanded back. - I.T.A. No. 7064/Mum/2012 - - - Dated:- 13-5-2016 - Shri Saktijit Dey, Judicial Member And Shri Ramit Kochar, Accountant Member For the Assessee : Shri Mihir Naniwadekar For the Revenue : Shri A. Ramachandran, DR ORDER Per Ramit Kochar, Accountant Member This appeal, filed by the assessee company, being ITA No. 7064/Mum/2012, is directed against the order dated 31-10-2012 passed by learned Commissioner of Income Tax (Appeals)- 2, Mumbai (hereinafter called the CIT(A) ), for the assessment year 2009-10, the appellate proceedings before the learned CIT(A) arising from the assessment order dated 20-12-2011 passed by the learned Assessing Officer (hereinafter called the AO ) u/s 143(3) of the Income Tax Act,1961(Hereinafter called the Act ). 2. The grounds raised by the assessee company in the memo of appeal filed with the Income Tax Appellate Tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re. The assessee company submitted that the assessee company has paid to Global Vipassana Foundation , a charitable trust owning Global Pagoda , ₹ 20 lacs towards business promotion expenses and ₹ 5 lacs towards staff welfare expenses for the use of Global Pagoda Mark by the assessee company. The copy of the agreement entered into between the assessee company and Global Vipassana Foundation was also attached. The assessee company submitted that Global Vipassana Foundation has tremendous following in the world and its Global Pagoda Mark is world famous. The assessee company obtained the permission to use this famous mark to reach its customers. The payment has been made for the use of this mark and there is no capital element in it. The assessee company submitted that the amount of ₹ 25 lacs has been paid keeping in view the business interest. In support the assessee company relied upon the decision in the case of Mysore Kirloskar v. CIT, 166 ITR 836. The assessee company submitted that by availing the right to use of the Global Pagoda Mark , the assessee company s interest have been served very well and the products of the company have reached across to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tary evidences were provided by the assessee company. Thus , the claim of the assessee company u/s 37(1) of the Act was denied by the A.O. and in support the AO relied upon the decisions of Hon ble Bombay High Court in the cases of Goodlass Nerolac Paints Ltd. v. CIT (Bom), 137 ITR 58 and Indian Hume Pipe Co. Ltd. v. DCIT (Bom), 311 ITR 146, vide assessment orders dated 20.12.2011 passed by the AO u/s 143(3) of the Act. 5. Aggrieved by the assessment orders dated 20.12.2011 passed by the A.O. u/s. 143(3) of the Act, the assessee company has filed first appeal before the learned CIT(A). 6. Before the learned CIT(A) the assessee company submitted that an amount of ₹ 25 lacs was paid to Global Vipassana Foundation under an agreement, whereby it will get the benefit of workshop/courses for its employees for professional an intellectual development. Thus, this is a matter of commercial expediency hence the payments have been made. The assessee company submitted that it has the right to use the famous Global Pagoda Mark and all rights, benefit and interest in relation thereto. The assessee company was entitled to use the said mark on its products for its existing business. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n as revenue expenditure then it partakes the character of royalty and fees for technical services payments , and no tax has been deducted at source by the assessee company as per provisions of the Act and hence it cannot be allowed as deduction as per section 40(a)(ia) of the Act. The learned CIT(A) concluded that this is a donation paid by the Directors for their spiritual satisfaction and not at all related to the business carried on by the assessee company . The additions made by the AO were sustained by the learned CIT(A) vide appellate orders dated 31.10.2012. 7. Aggrieved by the appellate order dated 31.10.2012 of the learned CIT(A), the assessee company filed second appeal before the Tribunal. 8. Before the Tribunal, the ld. Counsel for the assessee company submitted that payment of ₹ 25 lacs was made to Global Vipassana Foundation which was meant for meditation for the employees and for the Global Pagoda marks to be used by the assessee company for its business purposes . The ld. Counsel for the assessee company submitted that in the case of sister concern of the assessee company i.e. Chemito Technologies P. Ltd. v. Addl. CIT in ITA No. 447/Mum/2013 for the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd restore this issue to the file of the learned CIT(A) for the purpose of de-novo determination of the issue on merits in accordance with law after verification and examination of the receipt and other relevant documents connected with the payment of ₹ 25 lacs to Global Vipassana Foundation by the assessee company during the previous year relevant to the assessment year in accordance with the Act and rules made thereof and if the claim of the assessee company is found to be genuine and correct in accordance with the law, then the claim of the assessee company may be allowed by the learned CIT(A) on merits in accordance with the law. The learned CIT(A) while deciding the appeal in set aside de-novo proceedings shall keep in view the decision of the co-ordinate benches of the Tribunal , Mumbai in the case of Chemito Technologies P. Ltd. (supra) whereby the Mumbai Tribunal in ITA no. 447/Mum/2013 for the assessment year 2009- 10 vide orders dated 16.10.2015 has given the following findings:- Keeping in view of the arguments advanced by the learned representatives of both the parties and on careful perusal of the records, we find it is not m dispute that the assessee made p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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