DCIT, New Delhi v. M/s. TEI Technologies (P) Ltd., New Delhi

ITA 3085/DEL/2010 | 2006-2007
Pronouncement Date: 21-01-2011 | Result: Dismissed

Appeal Details

RSA Number 308520114 RSA 2010
Bench Delhi
Appeal Number ITA 3085/DEL/2010
Duration Of Justice 7 month(s) 2 day(s)
Appellant DCIT, New Delhi
Respondent M/s. TEI Technologies (P) Ltd., New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 21-01-2011
Appeal Filed By Department
Order Result Dismissed
Bench Allotted H
Tribunal Order Date 21-01-2011
Date Of Final Hearing 14-01-2011
Next Hearing Date 14-01-2011
Assessment Year 2006-2007
Appeal Filed On 18-06-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: H NEW DELHI BEFORE SHRI RAJPAL YADAV JUDICIAL MEMBER AND SHRI K.G. BANSAL ACCOUNTANT MEMBER I.T.A NO. 3085/DEL/10 ASSTT. YEAR 2006-07 DY. COMMISSIONER OF INCOME TAX CIRCLE 16(1) NEW DELHI. VS. M/S. TEI TECHNOLOGIES (P) LTD. 24 2 ND FLOOR OKHLA INDUSTRIAL ESTATE PHASE-III NEW DELHI 110 020. (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI AMRENDRA KUMAR SR. DR RESPONDENT BY: SHRI JATIN JINDAL CA ORDER PER RAJPAL YADAV JM: THE REVENUE IS IN APPEAL BEFORE US AGAINST THE ORD ER OF LD. CIT(A) DATED 5 TH APRIL 2010 PASSED FOR ASSTT. YEAR 2006-07. 2. IN THE FIRST GROUND OF APPEAL GRIEVANCE OF THE REVENUE IS THAT LD. CIT(A) HAD ERRED IN HOLDING THAT PAYMENT OF RS. 1 3 5 01 044/- MADE BY THE ASSESSEE AS TECHNICAL SUPPORT FEES IS A REVENUE EXPENDITURE. ITA NO. 3085/10 ASSTT. YEAR 2006-07 2 3. LD. COUNSEL FOR THE ASSESSEE AT THE VERY OUTSET SUBMITTED THAT ISSUE IN DISPUTE IS SQUARELY COVERED IN FAVOUR OF T HE ASSESSEE BY THE DECISION OF HONBLE DELHI HIGH COURT RENDERED IN TH E ASSTT. YEAR 2001-02. LD. DR WAS UNABLE TO CONTROVERT THE CONTENTION OF L D. COUNSEL FOR THE ASSESSEE. 4. LD. CIT(A) HAS NOTICED THE FACTS IN PARAGRAPH 5 ON THIS ISSUE WHILE TAKING NOTE OF THE WRITTEN SUBMISSIONS FILED BY THE ASSESSEE. THESE FACTS READ AS UNDER :- 3.1 DURING THE YEAR THE APPELLANT INCURRED AN EXPE NSE OF RS. 1 35 01 044/- ON ACCOUNT OF PAYMENT OF TECHNICAL SU PPORT FEES UNDER THE TECHNICAL ASSISTANCE AGREEMENT ENTERED BY THE C OMPANY WITH TYCO ELECTRONIC CORPORATION INDIA LIMITED (TECIL) BANGALORE AND ELENTEC COMPANY LIMITED KOREA (ELENTEC). IN CONSID ERATION FOR THE SERVICES UNDER THE SAID AGREEMENTS THE APPELLANT W AS REQUIRED TO PAY ELENTEC AND TECIL A SUPPORT FEE AT A SPECIFIED PER CENTAGE OF ITS TOTAL TURNOVER WHICH HAS BEEN 1.5% OF THE TOTAL TURNOVER W.E.F. FROM JULY 26 2003 ( COPIES OF THE AGREEMENTS ARE ENCLOSED AS ANNEXURE 1 & 2 AT PAGES 1 TO 7 AND 8 TO 13 OF THE PAPER BOOK RESPECTI VELY). THE SIMILAR ADDITION WAS ALSO MADE IN EARLIER YEARS I.E . AY 2001-02 AY 2002-03 AY 2003-04 AY 2004-05 AND AY 2005-06. THE LD. AO DISALLOWED THE ABOVE PAYMENTS BY HOLDING THAT THESE EXPENSES ARE CAPITAL IN NATURE. THE SAID ADDITION WAS MADE BY TH E LD. AO ONLY ON THE PRETEXT THAT THE SIMILAR ADDITION WAS MADE BY H IS PREDECESSORS IN AY 2001-02 TO 2005-06. 3.2 IN THIS REGARD THE APPELLANT RESPECTFULLY SUBM ITTED THAT FOR AY 2001-02 YOUR GOODSELF PREDECESSOR HAD ALLOWED THE CLAIM OF THE APPELLANT BY HOLDING THAT THE EXPENDITURE IS ALLOWABLE DEDUCTION AS REVENUE EXPENDITURE. FURTHER THE SAID ORDER OF THE LD. CIT (A) FOR A.Y 2001-02 HAS BEEN CONFIRMED BY THE HONBLE INCOME-TAX APPELL ATE TRIBUNAL (ITAT). LATER ON THE HONBLE HIGH COURT OF DELHI IN ITS ORDER DATED FEBRUARY 19 2008 IN ITA NO. 909/2007 ALSO DISMISSE D THE APPEAL OF DEPARTMENT AGAINST THE ORDER OF HONBLE ITAT DELHI IN THE ASSESSEES OWN CASE. HENCE THE ABOVE ISSUE HAS BEEN DECIDED I N THE FAVOUR OF THE ASSESSEE BY THE APPELLATE AUTHORITIES IN AY 200 1-02 ITSELF. SIMILARLY THE APPELLATE ORDERS OF AY 2002-03 AY 2 003-04 AY 2004-05 AND AY 2005-06 WERE DECIDED IN FAVOUR OF THE APPELL ANT BY THE LD. ITA NO. 3085/10 ASSTT. YEAR 2006-07 3 CIT(A) AND WHICH WERE LATER ON AFFIRMED BY HONBLE ITAT. COPY OF THE HIGH COURT ORDER DATED FEBRUARY 19 2008 IN ITA NO. 909/2007AND COPY OF THE ORDER OF THE HONBLE ITAT AND CIT(A) FO R THE ASSESSMENT YEAR 2005-06 ARE ENCLOSED AS ANNEXURE-3 4 AND 5 AT PAGES 14 TO 26 3.3 FURTHER YOUR GOODSELF HAS ALSO ALLOWED THE SIM ILAR CLAIM IN AY 2004- 05 & 2005-06 VIDE ORDER DATED AUGUST 22 2008 AND SEPTEMBER 16 2008 IN APPEAL NO. 160/2006-07 AND 309/2007-08 RESP ECTIVELY. THERE IS NO CHANGE IN THE FACTS AND CIRCUMSTANCES OF CASE FOR THE YEAR UNDER APPEAL. HENCE IT IS RESPECTFULLY PRAYED THAT THE A PPELLATE ORDERS OF EARLIER YEARS MAY KINDLY BE FOLLOWED IN THIS YEAR. RELIANCE IS PLACED ON THE DECISION OF RADHASOAMI SATSANG VS. CIT[1992][19 3 ITR 321] WHERE IN IT HAS BEEN HELD THAT RULE OF CONSISTENCY SHOULD BE FOLLOWED IN TAX PROCEEDINGS. 3.4 FURTHER THE RELIANCE IS ALSO PLACED ON FOLLOWI NG DECISIONS WHEREIN IT HAS BEEN HELD THAT THE DECISION OF THE JURISDICTION AL HIGH COURT AND TRIBUNAL AND THAT TOO IN ASSESSEES OWN CASE ARE BI NDING ON THE LOWER AUTHORITIES . BANK OF BARODA VS. H.C. SHRIVASTAVA AND ANR 256 IT R 385 (BOM) VOEST ALPINE IND. GMBH VS. ITO [2000] [246 ITR 745] [CAL.] KHALID AUTOMOBILES VS. UNION OF INDIA [1995] 4 SCC (SUPPL..) 653 5. THE ORDER OF THE HONBLE DELHI HIGH COURT IN ITA NO. 909 OF 2007 DECIDED ON 19.2.2008 HAS BEEN PLACED ON RECORD BY T HE ASSESSEE AT PAGES NO. 1 TO 4 OF THE PAPER BOOK. SIMILARLY ASSES SEE HAS PLACED A RECORD THE ORDER OF THE TRIBUNAL IN ITA NO. 2658 AN D 2659/D/07 IN ASSTT. YEAR 2002-03 AND 2003-04. ON PERUSAL OF THESE ORDER S WE ARE OF THE OPINION THAT LD. CIT(A) HAS RIGHTLY ALLOWED THE CLA IM OF ASSESSEE THAT FEES FOR TECHNICAL SUPPORT IS TO BE TREATED AS REVE NUE EXPENDITURE. THE FIRST GROUND OF APPEAL IS REJECTED. ITA NO. 3085/10 ASSTT. YEAR 2006-07 4 6. IN THE NEXT GROUND OF APPEAL GRIEVANCE OF THE R EVENUE IS THAT LD. CIT(A) HAS ERRED IN ALLOWING THE DEPRECIATION @ 60% ON UPS. WITH THE ASSISTANCE OF LD. REPRESENTATIVE WE HAVE GONE THRO UGH THE RECORD CAREFULLY. WE FIND THAT LD. CIT(A) HAS ALLOWED THE CLAIM OF ASSESSEE BY FOLLOWING THE ORDER OF THE ITAT IN THE CASE OF ITO VS. SAMIRAN MAJUMDAR REPORTED IN 98 ITD 119 (CAL.). ITAT CALCUTTA HAS OB SERVED THAT UPS IS INTEGRAL PART OF THE COMPUTER AND THEREFORE DEPRECI ATION @ 60% IS ADMISSIBLE ON THIS. LD. FIRST APPELLATE AUTHORITY H AS CONSIDERED THE ISSUE IN DETAIL. ON DUE CONSIDERATION OF ALL THESE FACTS AND CIRCUMSTANCES WE DO NOT FIND ANY ERROR IN THE ORDER OF THE LD. CIT(A ). THIS GROUND OF APPEAL IS ALSO REJECTED. 7. IN THE RESULT APPEAL OF THE REVENUE IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON 21 ST JANUARY 2011. SD/- [K.G. BANSAL] [RAJPAL YADAV] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 21 ST JANUARY 2011 VEENA COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT ITA NO. 3085/10 ASSTT. YEAR 2006-07 5 3. CIT 4. CIT (A) 5. DR ITAT TRUE COPY BY ORDER DEPUTY REGISTRAR ITAT