IN THE INCOME TAX APPELLATE TRIBUNAL
(DELHI BENCH `C' : NEW DELHI)
BEFORE SHRI B.C. MEENA, ACCOUNTANT MEMBER
AND
SHRI A.T. VARKEY, JUDICIAL MEMBER
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
ORDER
PER B.C. MEENA, ACCOUNTANT MEMBER :
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
dismissed.
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
TS
Copy forwarded to:
1.Appellant
2.Respondent
3.CIT
4.CIT(A)-XV, New Delhi.
5.CIT(ITAT), New Delhi.
AR, ITAT
NEW DELHI.
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