TMI Blog2016 (10) TMI 1365X X X X Extracts X X X X X X X X Extracts X X X X ..... contentions to object the treatment of the amount either as business income or as capital gain. Having considered all these facts and also the law laid down in such decisions, the AO consciously reached a conclusion that the income is to be treated as capital gain but not as either capital receipt or business income. This is one of the probable views that could have validly be taken. By no stretch of imagination could it be said that the AO mechanically passed this order taking the view that the income has to be charged as capital gain. The AO made enquiries, called for details of such income and having considered the submissions of the assessee in respect of all the three probable views i.e. capital receipt, business income and capital gain, the AO for the reasons recorded in his order at page nos. 7 to 10, came to the conclusion that the income in dispute has to be charged as capital gain but not as capital receipt or business income. In this factual context, we are called upon to examine the question whether the CIT is justified in terming the order of AO as erroneous and without proper enquiry or on wrong assumption of the facts. In JMC Projects (India) Ltd. [ 2015 (12) TMI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e thought of expanding its business in Southeast and Middle East Asia as such, they have applied for registration of TIGER brand. At that time they came to know that Group Danone is registered TIGER brand in Singapore. Being aggrieved by such an act of Group Danone, the assessee filed a suit against Generale Biscuits and Danone Singapore Pte. Ltd. subsidiaries of Group Danone, in the High Court of Republic of Singapore and requested the court to pass an injunction or preventing them from using the TIGER brand. Assessee also prayed for cancellation of aforesaid registered trade mark. During the pendency of such litigation before the Courts of Singapore and Malaysia, Group Danone approached the assessee with a proposal of settlement. Discussions and deliberations resulted in a settlement dated 14.04.2009 reached between the parties whereunder Group Danone agreed to pay 3.5 million Euro (equivalent to Rs.22.79 cr.) received by the assessee on 20.04.2009. 3. The assessee claimed this amount as capital receipt in its return of income and pleaded that income as not chargeable to tax in India since it is in the nature of casual, windfall and voluntary, and at any rate it has not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) dated 26.03.2013 passed by the Jt.CIT, Range-7 for the AY 2009-10 even though the assessment order was not erroneous causing prejudice to the interest of the Revenue and in that view of the matter the order of the CIT u/s 263 dated 27.03.2015 be cancelled. 2) For that on the facts and in the circumstances of the case, the CIT erred in setting aside the assessment and directing the AO to pass a fresh order of assessment even though in the show cause notice the assessment order was considered as erroneous only for a specific issue and in that view of the matter it was beyond CIT's jurisdiction to set aside the entire assessment; directing the AO to pass an order afresh. 3) For that on the facts and in the circumstances of the case, the CIT erroneously invoked his revisionary jurisdiction in exercise of supervisory powers even though in the assessment order the AO had examined at length the issue of taxability of the sum of Rs.22.79 crs which the assessee received under the Settlement Agreement and thereafter the AO having adopted one of the permissible course in law; the CIT was legally unjustified in invoking revisionary jurisdiction u/ s 263 of the Act. 4) F ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assed u/s. 263 of the Act. 7. Per contra, the argument of Ld. DR is that in this matter when the assessee does not have any trade mark at all in Singapore and Malaysia, transfer of such trade mark does not arise at all and to that extent the view taken by the AO is patently wrong, apparent on the face of record as such, the Ld. CIT is justified in invoking the provisions of section 263 of the Act. According to him, in this matter the AO failed in his duty to complete the assessment with proper enquiry and diligence. Arguing so, the Ld. DR heavily relied on the order of CIT. 8. In these facts and circumstances of the case the point that arises for our consideration is whether the CIT is justified in directing the AO to do fresh assessment after examining all the aspects of facts and law by invoking the provisions of section 263 of the Act. 9. We have heard rival submissions and carefully examined the record in the light of the submissions made by both the sides. Learned CIT in his order observed that the agreement that was entered into between the assessee and M/s. Group Danone is in the nature of noncompete agreement, not to launch the biscuit products under the trade mark ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unction or other remedies requiring the Kraft Parties to cease such infringements or to claim damages for such infringements); and (ii) continue the IP Proceedings (other than in respect of the Kraft Damages Claims) and proceedings before the Trade Marks Registry in Malaysia and to bring proceedings against the Kraft Parties or their Affiliates in other countries including in Indonesia, Pakistan and Egypt; but (e) does extend to any former officer or employee of Generale Biscuit or Kraft Foods Pte. Ltd. who was or is an officer or employee of Danone or any of their Affiliates. 11. Notwithstanding any possible application of the provisions of paragraph 10 above, (a) BIL and its Affiliates may use the BIL Tiger Logo in any country and Danone and its Affiliates will not take any steps to prevent the registration or use thereof. (b) BIL and its Affiliates shall be permitted to use the word tiger or any mnemonic depicting a tiger without restriction anywhere in the world and Danone and its Affiliates will not take any steps to prevent the registration or use thereof, provided that save as provided in (a) above, neither BIL nor its Affiliates are hereby p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the parties with whom such transactions were made. 13. To this query the assessee submitted an elaborate reply which is incorporated in page nos. 50 to 62 of the paper book. In this reply, the assessee set-forth the background of the matter vide Page nos. 50 to 53, reasons for their request to treat it as capital receipt in page nos. 54 to 55, the reasons for their objection to treat it as business income in page nos. 56 to 58 and the reasons not to consider the same as capital gain in page no. 59 to 62. AO in his order vide page nos. 7 to 10 elaborately discussed the contentions raised by the assessee and while brushing aside their submissions in respect of the capital receipt and business income AO preferred to take the view that such an amount is to be taxed under the head capital gain. It could be seen from the submissions of the assessee before the AO, the assessee placed reliance on so many decisions in respect of their contentions to object the treatment of the amount either as business income or as capital gain. Having considered all these facts and also the law laid down in such decisions, the AO consciously reached a conclusion that the income is to be treated as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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