TMI Blog2021 (9) TMI 736X X X X Extracts X X X X X X X X Extracts X X X X ..... he location of equipment could be in the shops of respective dealers or the dealers were allowed to use the equipment, that cannot be understood as divesting the ownership of assessee on the equipment. The Commissioner, as rightly pointed out by the Tribunal, assumed something more than what is either available in the circumstances of the case or made out literally a new case in favour of the assessee. For the above reasons we are of the view that the question does not fall within the scope of Section 260A of the Act. - Decided against assessee. Expenditure incurred on account of payments towards club membership and service charges - HELD THAT:- The assessee is entitled to claim only the membership fee but not the amount spent by the assessee for availing the services of goods etc. in the club. In the case on hand, the finding is that it is not for membership. Having regard to the findings of fact recorded, the question is answered in favour of the Revenue, against the assessee. Disallowance of part depreciation claimed by the assessee of Gurgaon building in relation to the let out portion to Appolo International Ltd. - Rule of consistency - HELD THAT:- Tribunal has merel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... am, Income Tax Department. JUDGMENT S.V. Bhatti, J. Heard learned Senior Counsel Mr. Joseph Markos and learned Standing Counsel Mr. Christopher Abraham for parties. 2. M/s .Apollo Tyres Ltd., Kochi/Assessee is the appellant. The Deputy Commissioner of Income Tax/Revenue is the respondent. The subject appeal is at the instance of Assessee from the order of Income Tax Appellate Tribunal (for short the Tribunal') Cochin Bench in ITA No.430/Coch/2006 dated 24.08.2012. The substantial questions stated in the instant tax appeal relate to the Assessment Year 2003-04. The assessee challenges the order of Tribunal in rejecting the assessee's claim made towards showroom expenses; disallowed depreciation in respect of portion of Gurgaon building rented out by assessee in favour of its sister concern Apollo International Ltd; expenditure on club payment towards cost of services and finally advances written off from the amount advanced by the assessee for purchase of capital items. The substantial questions are considered in the same order they are framed in the appeal. 3. The first question relates to assessee's claim of expenditure for purchasing equipments ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lly capital in nature i.e., creating of asset of enduring nature but the ownership has been passed on to the dealer and in the hands of the company it has to be treated as a sale or publicity expenses and hence should be allowed as a revenue expense. (sic installed) Thus, the total claim has been allowed. 3.2 The Tribunal, on appeal by the Revenue, has examined the crucial aspect in the finding recorded by the Commissioner namely, whether, in the manner stated by the assessee, circumstances as noted by the Assessing Officer and expanded by the CIT (Appeals), the ownership of equipment, in fact, is transferred to the dealers. The Tribunal upon examination of the record has held as follows: 4. However, from the rival submissions made, it transpires that the ownership of these assets would continue to remain with the assessee only. Hence, the view of the Ld CIT(A) is contrary to the facts. The Ld Counsel placed reliance on the common order dated 09-09-2009 rendered by this bench in the assessee's own case in ITA Nos. 538/Coch/2005, ITA No.273/Coch/05 and ITA No.25/Coch/04 and submitted that the Tribunal has considered an identical issue in paragraphs 21-23 of the said ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xpenditure claimed by the assessee should be allowed as revenue expenditure but not a portion of it as depreciation by treating the expenditure as capital expenditure. 6. Per contra, Standing Counsel Mr. Christopher Abraham argues that the crucial aspect in determining the expenditure is the nature of investment or utility derived by the assessee. It is stated, it is one aspect of the matter to state that the existing showroom has been refurbished by changing the interiors and providing aesthetic value to a showroom. So expenses incurred on account of such commercial contingencies/designs once are met by the assessee the return of asset, on which amount was expended, is not possible finally into the hands of the assessee. These expenses are more or less treated as expenses incurred as revenue expenditure. In the case on hand, the expenses incurred are towards purchase and establishment of equipment, such as wheel balancer/wheel aligner/wheel changer/tyre changer. The equipment, as rightly noted by the Tribunal, is movable equipments. The ownership is an important aspect in such expenditure. The equipment is also used by the respective dealers over a period of time but not booked ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 212/- by the assessee. The extent to which the expenses can be claimed by the assessee is considered by this Court in the case of assessee for the Assessment year 2002-2003 reported in Commissioner of Income Tax v. Apollo Tyres Ltd [(2019) 419 ITR 100]. At page 106 of the judgment of this Court in ITA No.1347/2009, the issue was considered and answered against the assessee. The operative portion which has bearing for answering the question of law reads as follows: The finding arrived at by the Tribunal is well supported by reasons. The amount spent for acquiring membership in the clubs stands on a different pedestal from the amounts incurred for availing materials supplied or service provided in the clubs. This Court finds that the said issue is to be answered in favour of the assessee. It is declared accordingly. 8.1 The assessee is entitled to claim only the membership fee but not the amount spent by the assessee for availing the services of goods etc. in the club. In the case on hand, the finding is that it is not for membership. Having regard to the findings of fact recorded, the question is answered in favour of the Revenue, against the assessee. 9. Substantial q ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... air charges aggregating to ₹ 27,27,505/- relating to the let out properties. Both the parties have pointed out that a similar disallowance made in preceding year was confirmed by the Tribunal in ITA No.426/Coch/2006. By the immediately following the said order of the Tribunal, we set aside the order of Ld CIT(A) on this issue and restore the addition made by the AO. 9.1 The excerpted finding of the Tribunal in the case on hand takes us to the consideration of similar issue by the Tribunal in ITA No.429/Coch/2006. It is not in dispute that the assessee has accepted the said finding of the Tribunal and allowed the finding to become final. The Tribunal has merely followed its earlier view and rejected the claim of petitioner under this head. No other ground is argued before us to contend that the view taken, at any rate, is impermissible in law. By taking note of the circumstances stated by the assessee in respect of this particular claim, and the consideration by the Tribunal, we are of the view that the Tribunal has rightly maintained consistency in this behalf for the Assessment Years 2002-03 and 2003-04. The question raised is answered in favour of the Revenue and agai ..... 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