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TMI Blog2018 (6) TMI 839X X X X Extracts X X X X X X X X Extracts X X X X ..... ommon issues, as a matter of convenience, these appeals were heard together and are being disposed-off by way of this consolidated order. ITA no.2856/Mum./2015 Assessee's Appeal - A.Y. 2007-08 3. At the outset, we propose to deal with the grounds raised on merit, hence, the legal issue raised in ground no.1 will be dealt with, if warranted, at a later stage. 4. In ground no.2, the assessee has challenged the decision of the learned Commissioner (Appeals) in upholding the disallowance of licence fee and management charges under section 44C of the Income Tax Act, 1961 (for short "the Act") by treating it as Head Office expenditure. 5. At the outset, the learned Authorised Representative submitted that in the interregnum learned Commi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the said notice, the assessee requested the Assessing Officer to treat the return of income filed originally to be a return of income in response to the notice issued under section 148 of the Act. During the assessment proceedings, the Assessing Officer noticed that in the relevant previous year, assessee has paid licence charges of Rs. 87,19,219, and management charges of Rs. 30,48,821, to M/s. Lloyd's Register, U.K., a Group concern. The Assessing Officer observed that the licence fee was paid in pursuance to licence agreement dated 16th July 2003, for use of Lloyd's Register branch name and logo, rules and all other technical and marketing intangibles. Similarly, management charges were paid as per management services agreement dated 16 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Act. Being aggrieved of the disallowance made by the Assessing Officer, assessee preferred appeal before the first appellate authority. 8. As discussed earlier in the order, the learned Commissioner (Appeals), ultimately vide order passed under section 154 of the Act, allowed the payment made towards licence fee. However, insofar as the payment of management fee is concerned, the learned Commissioner (Appeals) allowed to the extent of 50% out of the total payment of Rs. 30,48,821. Being aggrieved, assessee is in appeal before the Tribunal. 9. The learned Authorised Representative submitted that identical dispute arose in case of assessee's Group Company M/s. Lloyd's Register Asia (India Branch Office) in assessment year 2005-06 and whil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oyd's Register Asia (India Branch Office), supra, in assessment year 2005-06, the Tribunal has held that management charges paid to the Head Office do not come within the purview of section 44C of the Act. Following the aforesaid decision, the Tribunal in assessee's own case for assessment year 2008-09 and 2009-10, in ITA no.389-390/Mum./2013, dated 7th June 2017, r/w M.A. no.749-750/Mum./2017, dated 6th April 2018, has deleted the disallowance made under section 44C of the Act. Respectfully following the aforesaid decision of the Co-ordinate Bench, we delete the 50% disallowance made out of management charges under section 44C of the Act. Grounds raised are allowed. 12. In ground no.4, the assessee has challenged the applicability of prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n be made in respect of payment of management charges. There being no difference in fact, respectfully following the aforesaid decision of the Co-ordinate Bench, we allow the ground raised by the assessee. 18. In ground no.6, the assessee has challenged levy of interest under section 234B of the Act. 19. We have heard the parties. Since, the additions made are deleted, the levy of interest under section 234B of the Act being consequential would not arise. Suffice to say, while deciding identical issue in assessee's own case for assessment year 2008-09 and 2009-10 (supra), the Tribunal has held that no interest under section 234B of the Act is chargeable. Therefore, the ground has to be decided in favour of the assessee. 20. In view of ou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee towards licence fee, I.T. recharge and part of management charges. 29. While dealing with identical issue arising in assessee's appeal, it was seen that in assessment year 2007-08, the learned Commissioner (Appeals) following his own order in assessment year 2008-09 and 2009-10, has allowed 100% of the licence fee and the said decision has been accepted by the Department. As regards management charges, while deciding assessee's appeals on this issue, we have held that even 50% out of the management charges cannot be disallowed under section 44C of the Act. As regards the I.T. charge, it is seen that while deciding identical dispute in assessment year 2008-09 and 2009-10, in ITA no.519-520/Mum./2013, dated 7th June 2017, the Tribunal ..... X X X X Extracts X X X X X X X X Extracts X X X X
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