Ita/212/2009 Of The Commissioner Of Income Tax v. M/S. Class Marketing Services, Cochin

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR. JUSTICE C.K.ABDUL REHIM WEDNESDAY, THE 1ST JULY 2009 / 10TH ASHADHA 1931 ITA.No. 212 of 2009() --------------------- ITA.531/COCH//1999 of I.T.A.TRIBUNAL,COCHIN BENCH .................... APPELLANT/APPELLANT: ----------------------------- THE COMMISSIONER OF INCOME TAX, COCHIN. BY ADV. SRI.JOSE JOSEPH, SC, FOR INCOME TAX RESPONDENT(S): --------------- M/S CLASS MARKETING SERVICES, P.O.BOX NO.4279, G-214, PANAMPILLY NAGAR, COCHIN-682036. THIS INCOME TAX APPEAL HAVING COME UP FOR ADMISSION ON 01/07/2009, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: C.N.RAMACHANDRAN NAIR &C.K.ABDUL REHIM, JJ..................................................................... I.T. Appeal No.212 of 2009 ....................................................................Dated this the 1st day of July, 2009. JUDGMENT Ramachandran Nair, J. Question raised in the appeal filed by the Revenue is whetherTribunal was justified in granting deduction of royalty paid by theassessee to a sister concern for use of their brand name in the productmanufactured and sold by the assesee. We have heard Senior Counselappearing for the appellant. 2. We do not find any substantial question of law arising from theorder of the Tribunal because the first appellate authority as well as theTribunal found that the brand name is owned by Reliable Wares PrivateLimited, whose products were marketed by assessee only after14.6.1994. However, assessee under an agreement with the saidcompany started manufacturing and selling the products with the samebrand name "Perfet Flush". The agreement provides for payment ofRs.20/- per piece for use of brand name of the original manufacturernamely, Reliable Wares (P) Ltd. Senior counsel contended that mere application for registration does not confer right of ownership of thebrand name of Reliable Wares (P) Ltd. and so much so, the payment isnot bonafide. We are unable to accept this contention because pendingregistration, the exclusive holder of the brand name is Reliable Waresand assessee has no right to use the same unless permitted by the brandname holder. Department has no case that assessee can withoutinfringement use the brand name in which they manufacture and sellthe product. In view of the findings on facts by the lower authorities,we decline to entertain the appeal. Consequently appeal is dismissed. C.N.RAMACHANDRAN NAIRJudge pms C.K.ABDUL REHIM Judge