TaxTMI 
TaxTMI 
2014 (8) TMI 523
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.... resulting in nil taxable income. The assessing officer noticed that in Schedule 13 to the P& L a/c the assessee company had claimed deduction of Rs. 3,21,51,264/- on account of franchise fees. The assessing officer required the assessee to explain as to how such huge payment made to M/s Domino's Pizza International, Inc., USA was justified and why the same should not be disallowed in view of the decision in the case of CIT Vs. Southern Switchgear Ltd. 148 ITR 272, being in the nature of capital expenditure. The assessee vide its submissions dated 15-12-2008 reiterated written submissions placed before the ld. CIT(A) in assessee's own case for A.Y. 2003-04 on the similar additions made in the year, which was pending adjudication by ld. CIT(A). Therefore, the assessing officer following the decision of Hon'ble Madras High Court in the case of Southern Switchgear Ltd. (supra), held that 25% of technical fee had to be taken as capital expenditure and as such could not be allowed as revenue expenditure. He, accordingly, disallowed Rs. 80,37,816/-, treating the same as capital in nature. 2.1. Before ld. CIT(A) it was submitted that the assessee had entered into an agreement with the fr....
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....f the matter before arriving at the conclusion as drawn by him. He has elaborately discussed each and every issue in an appropriate manner specifying all the relevant details. Neither any contrary material had been placed on record by the Department nor noticed by this Bench which could convince us to take a different view than taken by Ld. CIT(A). As such, while concurring with the finding and conclusion as drawn by Ld. CIT(A) on the first limb of this issue, we uphold his order and dismiss the appeal of the revenue for the first limb of the issue involved." 3.1. Consistent with the view taken in earlier years, we uphold the finding of ld. CIT(A) who has relied on various decisions of Hon'ble Delhi High Court and it is not disputed that the assessee had acquired only access to the technical information and there was no transfer of ownership with respect to the process and the know-how under the agreement in favour of the assessee. Therefore, this payment could only be categorized as one made on revenue account. 4. In the result, department's appeal is dismissed. Assessee's appeal : (ITA no. 3781/Del/2012) 5. The assessee has raised as many as 7 grounds of appeal. However, the o....
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.... was entitled to spend the remaining balance to the next five years i.e. till July 2008. The assessee further pointed out that till AY 2005-06 assessee had spent only 3,28,65,590/- and the balance amount was still outstanding in the books of a/c till July 2008. Thus, the position in books of a/c was different from the actual amounts offered for taxation. Since the entire amount of Rs. 8 crore had been adjusted against the advertisement expenses by AY 2005-06, the assessee was not required to offer any further sum in AY 2006-07. However, under mistaken conception the assessee reduced the advertisement expenses for A.Y. 2006-07 by Rs. 1,45,20,000/-. The assessee has further pointed out that in course of assessment proceedings, the assessee brought these facts to the knowledge of the assessing officer vide its submission dated 15-12- 2008. However, the assessing officer ignored the submissions, which resulted in double taxation of Rs. 1,45,20,000/-. Accordingly, the assessee submitted that this amount may be deleted. 5.3. Ld. CIT(A), however, rejected the assessee's plea, inter alia, observing that the matter was referred to the assessing officer vide office letter dated 14-12-2010 f....
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..... CIT 187 ITR 688, observing as under: "The declaration of law is clear that the power of the Appellate Assistant Commissioner is conterminous with that of the Income tax Officer, and if that is so, there appears to be no reason as to why the appellate authority cannot modify the assessment order on an additional ground even if not raised before the Income tax Officer. No exception could be taken to this view as the Act does not place any restriction or limitation on the exercise of appellate power. Even otherwise, an appellate authority while hearing the appeal against the order of a subordinate authority, has all the powers which the original authority may have in deciding the question before it subject to the restrictions or limitations, if any, prescribed by the statutory provisions. In the absence of any statutory provision, the appellate authority is vested with all the plenary powers which the subordinate authority may have in the matter. There appears to be no good reason and none was placed before us to justify curtailment of the power of the Appellate Assistant Commissioner in entertaining an additional ground raised by the assessee in seeking modification of the order o....