TMI Blog2015 (11) TMI 853X X X X Extracts X X X X X X X X Extracts X X X X ..... extent of ₹ 5,49,000 is deleted. - Decided in favour of assessee. Disallowance of trade mark licence fee - Held that:- This Tribunal found that nothing uncommon in the assessee's making payment to use the trade mark "Redington" to M/s. Redington Distribution Pte. Ltd., Singapore. By placing its reliance on the order of this Tribunal in the assessee's own case for the assessment year 2009-10 and the judgment of the apex court in S. A. Builders Ltd. v. CIT (Appeals) [2006 (12) TMI 82 - SUPREME COURT ] this Tribunal found that the expenditure claimed by the assessee is an allowable expenditure. Since the facts are identical, this Tribunal is of the considered opinion that the claim of the assessee has to be allowed as business expend ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd CHANDRA POOJARI (Accountant Member) R. Vijayaraghavan for the appellant. S. Balasubramanian for the respondent. ORDER The order of the Bench was delivered by 1. N. R. S. Ganesan (Judicial Member).-This appeal of the assessee is directed against the order of the Commissioner of Income-tax (Appeals)-V, Chennai, dated October 26, 2012 and pertains to the assessment year 2008-09. 2. Shri R. Vijayaraghavan, learned counsel for the assessee submitted that the first issue that arises for consideration is adjustment of ₹ 5,49,000 in respect of corporate guarantee provided to associated enterprise, namely, M/s. Redington Distribution Pte Ltd., Singapore. 3. Referring to the order of this Tribunal dated June 26, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... artmental representative, for the assessment year 2007-08, a similar adjustment was made to the extent of ₹ 1,84,17,371. This Tribunal after placing its reliance on the decision of the Delhi Bench of this Tribunal in Bharti Airtel Ltd. v. Addl. CIT [2014] 2 ITR (Trib)-OL 475 (Delhi), found that providing corporate guarantee to its associated enterprise does not involve any cost to the assessee, therefore, it is outside the ambit of international transaction to which the arm's length price adjustment has to be made. Since the facts are identical for the year under consideration, this Tribunal is of the considered opinion that the decision of this Tribunal in the assessee's own case for the assessment year 2007-08 (Redington (In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... penditure claimed by the assessee is an allowable expenditure. Since the facts are identical, this Tribunal is of the considered opinion that the claim of the assessee has to be allowed as business expenditure. By following the orders of this Tribunal for the assessment year 2009-10 and 2007-08, the orders of the lower authorities are set aside and the Assessing Officer is directed to allow the claim of the assessee towards trade mark licence fee as business expenditure. 10. The next issue that arises for consideration is disallowance of ₹ 2,55,33,000 under section 14A of the Act. 11. Shri R. Vijayaraghavan, learned counsel for the assessee submitted that the investment was made out of the internal accruals. Learned counsel furt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome-tax Rules. The learned Departmental representative further submitted that the assessee now claims before this Tribunal that no borrowed funds were used for making investment and the assessee has invested its own funds in other companies. The assessee also claims that as on March 31, 2008 ₹ 5,69,55,22,000 was the capital and reserves and surplus. These facts were not available before the lower authorities. Therefore, according to the learned Departmental representative, the Commissioner of Income-tax (Appeals) has rightly confirmed the disallowance made by the Assessing Officer. 13. We have considered the rival submissions on either side and also perused the material available on record. The assessee now claims before this Tribu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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