The Commissioner Of Income Tax, Chennai v. M/S.redington India Ltd

IN THE HIGH COURT OF JUDICATURE AT MADRASDATED : 03.08.2021 THE HON'BLE MR. JUSTICE T.S. SIVAGNANAMAND THE HON'BLE MR. JUSTICE SATHI KUMAR SUKUMARA KURUP T.C.A. No.426 of 2021 The Commissioner of Income Tax,Chennai.... Appellant/RespondentVs. M/s.Redington India Ltd.,95, Mount Road, SPL Guindy House,Guindy, Chennai – 600 032.... Respondent/Appellant Tax Case Appeal preferred under Section 260A of the IncomeTax Act, 1961, against the order of the Income Tax AppellateTribunal,Madras,“D”Bench,dated18.10.2016inI.T.A.No.1155/Mds/2016, Assessment Year 2011-12. Against the order of Deputy Commissioner of Income Tax,Corp. Circle 5(1) Chennai-34, in PAN dated 29.02.2016against the order of Deputy Commissioner of Income Tax TransferPricing Officer - 2(2) (1/c) Chennai in F.No. R-501/TPO/2(2) A-Y-2011-2012 dated 28.01.2015. This appeal filed by the Revenue under Section 260-A of theIncome Tax Act, 1961 ("the Act" for brevity), is directedagainst the order, dated 18.10.2016, passed by the Income TaxAppellateTribunal,Chennai"D"Bench,inI.T.A.Nos.1155/Mds/2016, for the Assessment Year 2011-12. 2. The Revenue has raised the following substantialquestions of law for consideration. https://hcservices.ecourts.gov.in/hcservices/ “1.Is not the finding of the Tribunal perverse byallowing the claim of trademark, license fee paid bythe Assessee to its Associate Enterprise when thefacts remains that the Associate Enterprise is not theregistered owner of the trademarked? 2.Whether the Tribunal was right in notconsidering the fact that the Assessee had been usingthe trademark from 1993 whereas the AssociateEnterprise was formed only in the year 2005? 3.Whether the reasoning and finding of theTribunal that the investment made in the subsidiarycompany should be excluded while calculatingdisallowance under Rule 8D(2) read with Sec.14Aespecially when no such exception is provided underthe Statute? 4.Whether the Tribunal ought to have applied thedecision of the Apex Court in the case of MaxoppLimited which clearly held that Sec.14A disallowanceis to be made on investment made in the subsidiarycompany?” 3. We have heard Mr.T.Ravi Kumar, learned Senior StandingCounsel for the appellant/Revenue and Mr.R.Vijayaraghavan,learned counsel appearing for the respondent/assessee. 4. We need not labour much to take a decision or answer thesubstantial questions of law framed for consideration on accountof the following events: The Tribunal, by the impugned order dated 18.10.2016,disposed of two appeals, viz., I.T.A.No.1155/Mds/2016 (impugnedin this appeal) filed by the respondent/assessee andI.T.A.No.1145/Mds/2016 filed by the Revenue. As against theorder in I.T.A.No.1145/Mds/2016, the Revenue had filed an appealbefore this Court in T.C.A.No.323 of 2021, which was disposed ofby the Division Bench of this Court on 21.06.2021 on the groundthat the assessee has availed the benefit of Vivad se VishwasScheme. To be noted that the assessee has paid the entire taxand Form-3 was filed under the said Act on 15.04.2021, which hasbeen received by the Department. The present appeal by theRevenue is against the order, dated 18.10.2016, inI.T.A.No.1155/Mds/2016, which was an appeal filed by theassessee and allowed by the Tribunal and against which, theRevenue are before us. 5.Since the assessee has already filed Form-3 declarationand paid the entire tax, the appellant Department/competentauthority is directed to proceed to consider the Form-3declaration in terms of the provisions of the Direct Tax Vivadse Vishwas Act, 2020 (Act 3 of 2020), read with Direct Tax Vivadse Vishwas Rules, 2020. We make the position clear that theassessee should not be put in a worse off position because wehave entertained this appeal after condoning the delay. We havedone so because the assessee should be able to get comprehensiverelief and the competent authority under the Act should be ableto process the Form-3 declaration filed by the assessee. 6.With these observations, the Tax Case Appeal standsdisposed of and the substantial questions of law are left openfor consideration. No costs. Sd/- Assistant Registrar(CS III) //True Copy// mkn Sub Assistant Registrar To 1.The Income Tax Appellate Tribunal, Chennai, “D” Bench. 2.The Commissioner of Income Tax, Chennai. 3.The Deputy Commissioner of Income Tax, Corp. Circle 5(1), Chennai-34. 4.The Deputy Commissioner of Income Tax Transfer Pricing Officer - 2(2) (1/c), Chennai. Transfer Pricing Officer - 2(2) (1/c), Chennai. +1cc to Mr.Subbaraya Aiyar Padmanaban, Sr No.38287 +1cc to Mr.T.Ravikumar, Sr No.37914 Tax Case Appeal No.426 of 2021 PVS (CO)PR (26/08/2021)