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TMI Blog2022 (9) TMI 33X X X X Extracts X X X X X X X X Extracts X X X X ..... Shri V. Durga Rao, Judicial Member And Shri G. Manjunatha, Accountant Member For the Appellant : Shri AR. V. Sreenivasan, Addl. CIT For the Respondent : Shri S. Gautham, Advocate for Shri R. Sivaraman, Advocate ORDER PER V. DURGA RAO, JUDICIAL MEMBER: This appeal filed by the Revenue is directed against the order of the ld. Commissioner of Income Tax (Appeals) 15, Chennai, dated 22.09.2020 relevant to the assessment year 2017-18. The only effective ground raised in the appeal of the Revenue relates to deletion of disallowance of royalty claim of ₹.82,16,52,689/-. 2. The appeal filed by the Revenue is delay by 481 days in filing the appeal. The Assessing Officer has filed an affidavit towards condonation of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed as capital in nature as per provisions of section 32 of the Act. After considering the submissions of the assessee, the Assessing Officer has observed that since the Department has not accepted the decision of the ITAT in assessee s own case for earlier assessment years and preferred further appeal before the Hon ble Madras High Court, the payment of royalty was disallowed to the extent of ₹.82,16,52,689/- after allowing depreciation on royalty @ 25% of ₹.27,38,84,230/-. On appeal, by following the decision of the ITAT in assessee s own case for earlier assessment years, the ld. CIT(A) deleted the disallowance of royalty payment. 4. Aggrieved, the Revenue is in appeal before the Tribunal. By referring to the grounds of app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the considered opinion that for the purpose of using the logo, the assessee has to necessarily make the payment. In the case before us, the payment was made on turnover basis, therefore, the same has to be allowed as revenue expenditure u/s 37(1) of the Act. This Tribunal do not find any reason to interfere with the order of the CIT(A) and accordingly, the same is confirmed. 6.1 Moreover, similar issue was subject matter in appeal before the Tribunal in assessee s group case in the case ACIT v. Shriram City Union Finance Ltd. in I.T.A. No. 433/Chny/2021 dated 29.07.2022, wherein, by following the decision of the Tribunal in assessee s own case for the assessment year 2016-17 in I.T.A. No.2007/Chny/2019 as well as in the case of DCI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of 12.5%. According to the Ld. D.R., the payment made to Shriram Ownership Trust towards royalty is nothing but a capital expenditure, therefore, the Assessing Officer has rightly allowed depreciation. Hence, according to the Ld. D.R., the CIT(Appeals) is not justified in deleting the addition made by the Assessing Officer. 28. On the contrary, Shri R. Sivaraman, the Ld. Counsel for the assessee, submitted that the assessee-Trust was using Logo of Shriram Ownership Trust for its business and paid royalty. According to the Ld. counsel, Shriram Ownership Trust is a separate entity. For using its Logo in the business of the assessee, a payment needs to be made and the assessee is not purchasing the Logo. What was obtained by the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decision of the Tribunal, the ld. CIT(A) has rightly deleted the disallowance made by the Assessing Officer towards payment of royalty. Thus, we find no reason to interfere with the order passed by the ld. CIT(A). Accordingly, the ground raised by the Revenue is dismissed. Respectfully following the decision of the Tribunal, the ld. CIT(A) has rightly deleted the addition towards disallowance of payment of royalty made by the Assessing Officer. Thus, we find no infirmity in the order passed by the ld. CIT(A) on this issue. Accordingly, the ground raised by the Revenue is dismissed. 7. In the result, the appeal filed by the Revenue is dismissed. Order pronounced on 30th August, 2022 at Chennai. - - TaxTMI - TMITax - Income Ta ..... X X X X Extracts X X X X X X X X Extracts X X X X
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