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2016 (10) TMI 1365

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..... idiaries M/s. Generale Biscuit, French and M/s. Danone Asia pte. Ltd.,( in short Group Danone) Singapore were also engaged in the business of dairy products, bakery and confectionery products, bottled water etc. In 1989, M/s. Generale Biscuit, which is a subsidiary of Group Danone applied for trade mark registration of 'TIGER' logo and brand in the confectionery and bakery products at Singapore and got it registered in 2003 in the name of Generale Biscuits. However, even from 2000 onwards, Group Danone began using 'TIGER' logo at Indonesia, Pakistan, Malaysia and Egypt without the knowledge of the assessee. While the matter stood thus, in the year 2005, the assessee 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. Asses .....

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..... ccording to him, for all practical purposes such payment was business income. In his order passed u/s. 263 of the Act, the Ld. CIT observed that the omission of the AO to take notice of this vital factual aspect and then to apply the law made the assessment order erroneous and prejudicial to the interest of revenue as such, he is justified to order the AO for fresh assessment after examining all the aspects of the facts and law applicable thereto. 5. Aggrieved by this order of Ld. CIT, assessee is now in appeal before us on the following grounds: "1) For that on the facts and in the circumstances of the case, the CIT erred in revising the order u/s 143(3) 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 i .....

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..... one of such possible view, it is not open for the CIT to invoke jurisdiction u/s. 263 of the Act only to superimpose his opinion on an otherwise legal opinion of the AO which was also quite probable having regard to the facts and circumstances of the case. Mere erroneous order or orders prejudicial to the interest of revenue alone are not sufficient to empower the CIT to invoke the provisions of section 263 of the Act inasmuch as such orders have to be invoked only when the AO has taken an apparent improbable view with relation to the facts and circumstances surrounding the case. For these reasons, he prayed to quash the order of CIT passed 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 re .....

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..... erty registered in the name of Generale Biscuit and the other intellectual property which is the subject of the IP Proceedings; (c) does not release any Claim by BIL against the Kraft Parties or their Affiliates except as set out in paragraph 1(c) above (the Kraft Damages Claims); (d) (in respect of the period commencing 1 December 2007), is without prejudice to BIL's right to (i) continue and/or initiate any proceedings in any court in respect of infringements of its intellectual property rights against the Kraft Parties or their Affiliates other than the Kraft Damages Claims (including claims for an injunction 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 A .....

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..... d from using the trade mark then such a compensation cannot be treated as business income, he submitted that the view taken by the CIT also is equally lopsided. 12. Now coming to the proceedings before the Assessing Officer, we find from the Paper book that Page No. 46 thereof is the letter dated 05.12.2012 where under the AO sought some information from the assessee and such information includes the following question also: "What is the nature of capital receipt towards the settlement of litigation of Rs.22.79 cr. during the financial year? Also furnish the details, names and addresses 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 .....

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