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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 ..... edings before learned CIY(A) had arisen from assessment order dated 28.12.2018 passed by learned Assessing Officer ( hereinafter called " the AO") u/s 143(3) of the Income-tax Act, 1961( hereinafter called " the Act"). 2. The grounds of appeal raised by assessee in memo of appeal filed with the Income-Tax Appellate Tribunal, Chennai (hereinafter called "the Tribunal") read as under:- "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 Rs. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... business expenditure as it is only permission to use the logo 'SHRIRAM' by assessee on non-exclusive basis as said logo is owned by 'Shriram Ownership Trust' and no exclusive or proprietary rights over said logo were acquired by the assessee . This is a recurring issue in the case of the assessee 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant's case, the CIT(A) by the order vide 412/2016-17 dated 27-8-2018 under para 4.3.2. has allowed appeal. Respectfully following the decision of Hon'ble ITAT and in line 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -14 in ITA no. 2502/Mds/2016 vide appellate orders dated 01.05.2017 has decided the issue in favour 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 tribu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... following the consistent stand of the tribunal in favour 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 invo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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