9911796707
TMI Blog2016 (9) TMI 1600X X X X Extracts X X X X X X X X Extracts X X X X ..... in nature. 3. The Brief facts of the case are that the ld. Assessing Officer did not accept the contention of the assessee that the logo charge was of revenue in nature and observed that the intention of the Legislature to treat such expenditure as capital in nature was evident from the introduction 25% depreciation on intangible assts such as technical know-how, patents, copyrights, trademarks, licences, franchise and business/ commercial rights of similar nature acquired after 01.04.1998. The ld. Assessing Officer further observed that the assessee company by utilizing the strong image and awareness in the minds of public created by the monogram 'ttk' would create an identity of its own in their minds regarding the quality of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee had agreed to pay another entity vide agreement dated 31.3.00/6.5.00 for using themonogram, namely "ttk". The relevant extract of the said agreement as available in the paper book reads as under:- "WHEREAS TTK has been in the business of various consumer andpharmaceuticals products and has been marketing and distributing the consumer and pharmaceuticals products for over five decades and has earned a wide reputation and has created a strong image and awareness on the minds of public and has also evolved an original artistic work in the form of a monogram entitled 'ttk' (hereinafter referred to as the said monogram) which has established an identity of its own in the public minds relating to the quality of the products and other s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of three years with effect from 1st April 2000, as per approval accorded by the Government of India vide letter No.2/M-7964 dated 3rd May, 2000. Copy of Government approval is annexed to this Agreement. 2. The License and permission granted by TTK in favour of TTK-LIG as aforesaid, shall entitle TTK-LIG, so long as this agreement in force, to use the said monogram on or in relation to the goods of TTK-LIG and in relation to the business activities of TTK-LIG, including the use of the said monogram on stationery, trade literature, packing of goods, labels, wrappers and advertisements of TTL-LIG. TTK-LIG shall not under any circumstances transfer or assign any of their rights under this agreement. 3. TTK-LIG accepts that the said monog ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nal Director, Department of Company Affairs, Chenai-6, do hereby approve under proviso to sub section (1) of section 297 of the Companies Act, for entering into contract with M/s.T.T.Krishnamachari & Co. for licensing use of trade name and logo thereof in consideration of payment of 2%license fee calculated on the total sales of the company for a period of 3 years with effect from 1.4.2000. 2. The approval accorded in para 1 above is subject to the following conditions: (i) The contract shall be for a period of 3 years with effect from 1.4.2000 to 31.3.2003. (ii) The total value of services to be availed from the contractee party herein shall not exceed the limit mentioned in para 1 above during the contract period. (iii) The pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee as royalty was revenue expenditure and was deductible under section 37(1) of the Incometax Act, 1961." 20.1. Similarly, the Co-ordinate Bench of Delhi ITAT in the case of DCM Benetton(supra) has also held usage of such brand name etc. to be revenue expenditure by observing as follows:- "From the agreement it is clear that the assessee was only granted non-assignable licence, right and privilege with reference to the licensed marks to manufacture on the mark and distribute the licensed product in India and to use the expression 'Benetton'. The assessee did not become the owner of the licensed marks or the holder of the trade-marks. Such license marks at all times remain the property of the licensor. The license was initially ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nor of the case law above cited to the facts of the instant case, we hold the instant 'logo' charges are also revenue expenditure within the meaning of Sec.37 of the Act in the nature of wholly and exclusively for the purpose of assessee's business. Consequently, we see no reason to interfere in the findings of the CIT(A). Therefore, the same are hereby upheld". Further, the same order was followed by this Tribunal in the assessment years 2004-05, 2008-09 & 2009-2010 in assessee's own case in ITA No.1897, 1898, 2029 & 2030/Mds.2011 and ITANo.1783/Mds/2012 vide order dated 02.06.2013. In view of the above order of the Tribunal, we are inclined to decide the issue against the Revenue. The appeal of the Revenue is dismissed. 6. In the r ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
