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ACIT, Circle 12 (1),New Delhi. Panchwati, Gurgaon (Haryana). vs. M/s. G4S Security Systems (India) Pvt. Ltd., 82A, Sector 18,
March, 14th 2014
                  (DELHI BENCH `C' : NEW DELHI)


                            ITA No.2125/Del./2013
                       (ASSESSMENT YEAR : 2009-10)

ACIT, Circle 12 (1),           vs.    M/s. G4S Security Systems (India) Pvt. Ltd.,
New Delhi.                            Panchwati, 82A, Sector 18,
                                      Gurgaon (Haryana).

                                             (PAN : AAACG2185M)

       (APPELLANT)                                  (RESPONDENT)

                   ASSESSEE BY : Shri Arun Bansal, CA
                 REVENUE BY : Shri Satpal Singh, Senior DR



       This appeal filed by the revenue emanates from the order of CIT

(Appeals)-XV, New Delhi dated 24.01.2013 for the assessment year 2009-10.

2.     The assessee company engaged in the business of providing and

installing the security systems, viz., CCTV systems etc. The return of income

was filed declaring a loss of Rs.1,99,38,274/- on 15.10.2010. The Assessing

Officer made an addition of royalty paid of Rs.12,75,823/- to M/s. Group 4

Holding which is 75% of the royalty paid and depreciation of 25% was

allowed.     The CIT (A) allowed the claim of the assessee as revenue

expenditure. The relevant para of the CIT (A) read as under :-
                                       2               ITA No.2125/Del./2013

      "5. I have carefully considered the facts of the case, order of
      the A.D. and the detailed submission made by the learned AR in
      the light of several Judicial pronouncements in this regard. Since
      on same facts the Hon'ble Delhi High Court in the case of
      appellant company has already dismissed the departmental
      appeal in earlier years and held the royalty expenses as revenue
      in nature and not capital, finality in the matter has been attained.

      5.2 In view of the same, respectfully following the decision of
      the Hon'ble Delhi High Court in the appellant's own case for
      A.Y. 2002-03, 2003-04 and 2005-06, I hold that the payment of
      royalty in the present case as allowable revenue expenditure.
      Therefore, the ground No.1 of the appeal is allowed in favour of
      the appellant."

3.    Now, the revenue is in appeal by taking the following grounds :-

      "1. On the facts and circumstances of the case and in law,
      the Ld. CIT (A) has erred in deleting the disallowance of
      royalty expenses of Rs.12,75,823/- holding the same as
      revenue expenditure.

      2.   The appellant craves leave to add, alter or amend any
      ground of appeal raised above at the time of hearing."

4.    At the outset of the hearing, the ld. AR submitted that this issue is

covered by the decision of ITAT in assessee's own case in the Assessment

Years 2007-08 and 2008-09 in ITA Nos.485/Del/2012 and 486/Del/2012

dated 20.04.2012.

5.    We have heard both the sides on the issue. We find that the ITAT has

granted the relief to the assessee relying on the decision of Hon'ble Delhi

High Court in the assessee's own case for Assessment Years 2002-03, 2003-

04 and 2005-06. The ITAT has allowed the claim of the royalty as revenue
                                       3              ITA No.2125/Del./2013

expenditure in assessee's own case in Assessment Years 2007-08 and 2008-

09 vide its order dated 20.12.2012. In view of these facts and circumstances

of the case, we find no merits in the appeal of the revenue and the same is


6.    In the result, the appeal of the revenue stands dismissed.

     Order pronounced in open court on this 12th day of March, 2014.

                  Sd/-                                   sd/-
           (A.T. VARKEY)                           (B.C. MEENA)
         JUDICIAL MEMBER                       ACCOUNTANT MEMBER

Dated the 12th day of March, 2014

Copy forwarded to:
     4.CIT(A)-XV, New Delhi.
     5.CIT(ITAT), New Delhi.
                                                              AR, ITAT
                                                             NEW DELHI.
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