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TMI Blog2019 (11) TMI 99X X X X Extracts X X X X X X X X Extracts X X X X ..... t these expenses are to be allowed as Revenue expenses while computing business income of the assessee and therefore, we dismiss the appeal filed by Revenue. The Revenue fails on this issue. Disallowance of expenditure incurred relatable to earning of an exempt income for computing book profits u/s 115JB by invoking provisions of Sec.14A r.w.r.8D - computing liability of the assessee of Minimum alternate tax u/s 115JB - HELD THAT:- The issue is no more res integra as Special Bench of Delhi Tribunal in the case of ACIT v. Vireet Investment (P.) Ltd. [ 2017 (6) TMI 1124 - ITAT DELHI] has held that computation under clause (f) of Explanation 1 to section 115JB(2). is to be made without resorting to the computation as contemplated u/s 14A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1. The order of the Ld. CIT(A) is contrary to the law and facts of the case. 2. The Ld. CIT(A) erred in deleting the disallowance of royalty payments of ₹ 56,10,000/- relying on the decision of the Chennai Bench of the Hon'ble Tribunal vide its order ITA No.2502/Mds/2016 dated 01-05-2017 for the AY 2013-14 in the assessee's own case, decided in favour of the assessee. 2.1. The Ld. CIT(A) failed to appreciate that the Revenue has filed an appeal against the said order of the Hon'ble Tribunal before the Hon'ble Madras High Court, which is still pending. 2.2. The Ld. CIT(A) erred in treating the expenditure of royalty payment as revenue in nature, though the assessee h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee as well in its associated concerns which is arising year after year. The assessee has contended that the Tribunal had upheld the said payment for use of logo in earlier years in ITA No.2502/Mds/2016 dated 01.05.2017 for ay: 2013-14 in assessee s own case as Revenue expenditure. The assessee pleaded before the AO to allow these expenses for use of logo as revenue expenses. The AO disallowed the aforesaid expenses to keep the matter alive as Revenue has not accepted the aforesaid appellate order passed by tribunal for earlier year and appeal u/s 260A was filed by Revenue with Hon ble Madras High Court challenging tribunal order, which was stated to be pending for adjudication, vide assessment order dated 28.12.2018 passed by the AO u/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with the order of CIT(A) in the appellant's case, the AO is directed to allow the royalty payment as revenue expenditure. The AO is also directed to withdraw depreciation allowed at the rate of 25%. In view of the above remarks, the appellant's ground is allowed . In nut shell, the Ld.CIT(A) allowed the appeal of the assessee based on appellate order passed by tribunal in assessee s own case for ay: 2013- 14 dated 01.05.2017 and appellate order passed by learned CIT(A) for ay: 2014-15 in assessee s own case, vide appellate order dated 16.04.2019. 4 Now, the matter has reached tribunal at the behest of the Revenue. The Ld.DR fairly submitted that this issue is covered by the decision o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ur of the assessee , by holding that these Royalty payments made for use of logo on non exclusive basis are Revenue expenditure which is to be allowed as deduction while computing income under the head Profits or Gains from Business or Profession . We have observed that the AO treated these expenses as capital expenditure to keep the issue alive as because Revenue had not accepted appellate order passed by tribunal for earlier year in assessee s own case and an appeal is filed by Revenue with Hon ble Madras High Court u/s 260A of the 1961 Act. Merely because an appeal is filed by Revenue with higher judicial forums will not preclude this tribunal from adjudicating the appeals unless it is shown that substantial question of l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r of the tax-payer, we hold that these expenses are to be allowed as Revenue expenses while computing business income of the assessee and therefore, we dismiss the appeal filed by Revenue. The Revenue fails on this issue. We order accordingly. 6. The second issue relates to the disallowance of expenditure by the AO incurred relatable to earning of an exempt income for computing book profits u/s 115JB of the 1961 Act by invoking provisions of Sec.14A r.w.r.8D of the Income-tax Rules, 1962 , for computing liability of the assessee of Minimum alternate tax u/s 115JB. The learned CIT(A) has decided the issue in favour of the assessee by holding that provisions of Section 14A cannot be invoked for making disallowance of expenses i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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