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TMI Blog2021 (9) TMI 957X X X X Extracts X X X X X X X X Extracts X X X X ..... vency and Bankruptcy Code, 2016 ('IBC') vide order of NCLT, Chennai Bench in CP No. 763/IB 2018 dated 28.09.2019 had admitted the application. It was further submission that at the time of receipt of the appellate order and till the date of filing the subject appeal, the assessee was undergoing the proceedings under IBC, 2016 and there were shortage of sufficient Personnel in assessee's company and thus, the ld. counsel prayed that the delay may be condoned and admit the appeal for adjudication, to which; the ld. DR has not raised any serious objection. Consequently, since the assessee was prevented by sufficient cause, the delay of 396 days in filing of the appeal stands condoned and the appeal is admitted for adjudication. 3. Brief facts leading to the disallowance of depreciation on trademark are that the Assessing Officer disallowed a sum of Rs..32,11,523/- claimed towards depreciation on the trademark owned by the assessee for the reason that the Deed of Assignment of Trademark and Copyright entered into by the assessee with M/s. Univercell Telecommunications India Private Limited is an invalid agreement for the following reasons:- i. Mr. D. Satish Babu, has signed on behal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that issue involved in this appeal is squarely covered in favour of the assessee and prayed for following the same. On the other hand, the ld. DR supported the order passed by the ld. CIT(A). 5. We have heard both the sides, perused the materials available on record and gone through the orders of authorities below. We have gone through the orders of the Tribunal in assessee's own case for the assessment years 2007-08, 2008-09 and 2015-16 in I.T.A. Nos. 967, 968 & 969/Chny/2019 dated 18.02.2020, wherein, order of the Tribunal in assessee's own case in I.T.A. Nos. 673-675/Chny/2018 was followed and relevant portion of the order is extracted as under: "6. The Ld.AR submitted that the AO made disallowance of depreciation on trade mark. On appeal, the Ld.CIT(A) confirmed the disallowance. In this regard, the Ld.AR submitted that this issue is covered in favour of the assessee in the assessee's own case for the AYs 2007-08 to 2009-10 in ITA Nos.673-675/Chny/2018 dated 16.05.2019. 7. We heard the rival submissions and gone through the relevant material. The relevant portion of the order relied on by the assessee is extracted as under: 6. The brief facts of the case are as under: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the very reopening the assessment is not valid in law, in as much as, reopening is based on change of opinion on the same set of facts which are in existence and also contending that Assessing Officer had no power to question the necessity to enter into transaction and also finding fault with the conclusion reached by the Assessing Officer that the transaction is malafide and transaction between assessee and M/s. Univercell Telecommunications India Pvt. Ltd is based on irrelevant material. However, ld. Commissioner of Income Tax (Appeals) dismissed the appeal both on the reopening and merits of the issue. 8. Being aggrieved, the appellant is in appeal before us in the present appeal. Ld. Authorised Representative Mr. B. Ramakrishnan, submitted that the conclusion reached by the Assessing Officer that it is an attempt by the parties to claim higher depreciation in order to evade taxes, it is based on the irrelevant material as much as appellant company had been incurring losses and M/s. Univercell Telecommunications India Pvt. Ltd is making profits. Further ld. Authorised Representative submitted that Assessing Officer as well as ld. Commissioner of Income Tax (Appeals) had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... p paper is immaterial and not germane to decide whether or not transaction is genuine. It is not the case of the Assessing Officer that substance of the transaction is something else. Therefore the reasoning of the Assessing Officer, as well as ld. Commissioner of Income Tax (Appeals) that the agreement is entered on post dated stamp paper, transaction is not genuine cannot be sustained. 12. As regards to the allegation that it is adopted to avoid evading the taxes, from the perusal of the assessment order, it is clear that even after disallowance of claim for depreciation on the trademark still the assessment resulted in losses. It is an admitted fact that payee had disclosed this income in his hands and therefore there is no motive of evasion of taxes, that can be attribute to this transactions. Finally necessity of entering into agreement, it is a settled proposition of law that it is not open to the Assessing Officer to question the necessity of incurring an expenditure and he cannot step into the shoes of the assessee as how to conduct the business of the assessee. In this connection, reliance can be placed on the decision of Hon'ble Supreme Court in the case of Eastern Inve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y if it has resulted in any income or profits came to be considered by the Supreme Court again in CIT v. Rajendra Prasad Moody [1978] 115 ITR 519 (SC), and it was observed as under (page 523): "We fail to appreciate how expenditure which is otherwise a proper expenditure can cease to be such merely because there is no receipt of income. Whatever is a proper outgoing by way of expendi ture must be debited irrespective of whether there is receipt of income or not. That is the plain requirement of proper accounting and the interpretation of section 57(iii) cannot be different. The deduction of the expenditure cannot, in the circumstances, be held to be conditional upon the making or earning of the income." It is noteworthy that the above observations were made in the context of section 57(iii) of the Act where the language is somewhat narrower than the language employed in section 37(1) of the Act. This fact is recognised in the judgment itself. The fact that the language employed in section 37(1) of the Act is broader than section 57(iii) of the Act makes the position stronger. 20. In the case of Sassoon J. David and Co. Pvt. Ltd. v. CIT [1979] 118 ITR 261 (SC), the Supreme C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lowance of advertisement expenditure and professional charges. During the course of assessment proceedings, the Assessing Officer noticed that the assessee company in its profit and loss account has claimed Rs..2,64,81,387/- towards advertisement expenditure and professional charges amounting to Rs..2,04,05,500/- viz., payment made towards Brand Ambassadors for promotion of the brand "UNIVERCELL". After considering the detailed explanations of the assessee, the Assessing Officer disallowed the claim of Rs..2,64,81,387/- advertisement expenditure and professional charges amounting to Rs..2,04,05,500/- and brought to tax. On appeal, the ld. CIT(A) confirmed the disallowance made by the Assessing Officer. 6.1 We have heard the rival contentions. Before us, the ld. Counsel for the assessee has submitted that the issue is squarely covered in favour of the assessee by the decision of the Tribunal in assessee's own case for earlier assessment years and prayed for following the same. We have gone through the orders of the Tribunal in assessee's own case for the assessment years 2007-08, 2008-09 and 2015-16 in I.T.A. Nos. 967, 968 & 969/Chny/2019 dated 18.02.2020, wherein, order of the Tri ..... X X X X Extracts X X X X X X X X Extracts X X X X
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