Frank Brotehrs & Co. Publication Ltd.,, ... vs Department Of Income Tax

DCIT Vs. Frank Brothers & Co. Publication Ltd., 4675-A/21, Ansari Road, Daryaganj New Delhi Delhi AAACF0781 E

(Appellant) (Respondent)

Appellant by : Smt. Parwinder Kaur, Sr. DR Respondent : Shri S.K. Aggarwal, CA

Date of hearing : 26.03.2015 Date of pronouncement : 06.05.2015

ORDER PER C.M.GARG, JUDICIAL MEMBER :

This appeal by the Revenue has been directed against the order

of the Commissioner of Income Tax (Appeals) - XIII dated 31.

12.2012 in appeal no. 311/2011-12 for A.Y. 2009-10. 2 ITA NO. 1108/ Del/2013

2. The sole ground raised by the Revenue reads as under :-

"On the facts and circumstance of the case and in law, the Ld. CIT(A) has erred in deleting the addition of Rs. 12,10,352/- made on account of royalty paid."

3. We have heard argument of both the sides and carefully

perused the relevant material placed on the records. At the very

outset, the Ld. Departmental Representative drawn our attention

towards assessee's paper book page 246 to 250 and submitted that

the ITAT, Delhi "D" Bench vide order dated 4.7.2012 in ITA No. 4663

(Del.) 2010 for A.Y. 2007-08 in assessee's own case i.e. DCIT Vs.

Mrs. Frank Brothers and Co. has restored the similar issue to the file

of AO to consider the issue and afresh, therefore, in the similar

manner with the similar set of facts and circumstances the sole issue

involved in the present case may kindly be restored to the file of AO

for proper verification examination and afresh adjudication. The Ld.

Assessee's Representative supported the impugned order and

submitted that the impugned addition made by the AO on account of

royalty paid was rightly deleted by the CIT(A) and hence impugned

order may kindly be upheld. However, the Ld. Counsel of the

assessee fairly accepted that the similar issue in A.Y. 2007-08 in 3 ITA NO. 1108/ Del/2013

assessee's own case has been restored to file of AO by the order of

the Tribunal dated 4.7.2012.

4. On careful consideration of above submissions from the

order of the Tribunal (Supra) at page 4, 5 and 6 paragraph no. 6, 6.1

and 6.2. The issue of royalty has been restored to the file of AO with

following observations and conclusion -:

"We have heard the Ld. Departmental Representative. None appeared on behalf of the assessee. Upon careful consideration, we find that matter can be disposed of by hearing the Ld. Departmental Representative and perusing the records. We find that Assessing Officer has made the impugned addition by comparing the royalty paid vis-à-vis sales of a particular year. Ld. Commissioner of Income Tax (A) has noted that assessee has submitted various copy of agreements with authors as well as detailed chart of royalty calculation. Considering these agreements and detailed chart of royalty, Ld. Commissioner of Income Tax (A) has held that the entire royalty payment is on revenue account and the disallowance made by the Assessing Officer for Rs. 27,21,133/- is deleted.

In this regard, it is the contention of the Ld. Departmental Representative that there is no mention in the appellate order as to whether the details of agreement and royalty charges, submitted before the Ld. Commissioner of Income Tax (A), were also given to the Assessing Officer. He further claimed that there is no mention in the appellate order that the remand report in this regard was sought. Hence, Ld. Departmental Representative contended that matter may be remitted to the file of the Assessing Officer to consider the issue afresh.

6.2 We have carefully considered the submissions and perused the records. In our considered opinion, interest of justice will be served, if the matter is remitted to the file of the Assessing Officer to consider the issue afresh. We hold 4 ITA NO. 1108/ Del/2013

and direct accordingly, needless to add that the assessee should be granted adequate opportunity of being heard."

5. In view of above, it is not in dispute that the similar addition on

account of royalty was made by the AO and deleted by the CIT(A) in A.

Y. 2007-08. In the present case, we are also in agreement with the

contention of the Ld. DR that there is no mention in the appellate order

as to whether the details of agreement and royalty charges were

submitted before the authorities below and there is also no mention in

the first appellate order that any remand report was sought by the

CIT(A) from the AO in this regard on the issue of royalty.

6. Therefore, We find just and proper to restore this issue to the file of

AO for afresh adjudication in the same line as was restored for AY

2007-08 by the order of the Tribunal dated 4.7.2012 (Supra).

Accordingly, we restore the issue to the file of AO with a direction that

he shall examine and verify the claim of royalty de novo after

considering relevant provisions of law as well as a details, evidence and

documents of the assessee including relevant agreement and details of

royalty charges and affording due opportunity of hearing for the

assessee and being influenced by the earlier assessment and

impugned order. Hence, sole ground of the revenue is deem to be

allowed for statistical purposes.

5 ITA NO. 1108/ Del/2013

7. In the result, appeal of the Revenue is deem to be allowed for

statistical purposes in the manner as indicated above.

Order pronounced in open court on 6th May, 2015.

Sd/- Sd/- (S.V.Mehrotra) (C.M.Garg) Accountant Member Judicial Member

Dated 6th May, 2015 B.Rukhaiyar Copy forwarded to 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. CIT (ITAT), New Delhi.

AR, ITAT N. Delhi 6 ITA NO. 1108/ Del/2013

Sl. Description Date No.

1. Date of dictation by the Author 1.05.2015

2. Draft placed before the Dictating 5.05.2015 Member

3. Draft placed before the Second Member

4. Draft approved by the Second Member

5. Date of approved order comes to the Sr. PS

6. Date of pronouncement of order

7. Date of file sent to the Bench Clerk

8. Date on which file goes to the Head Clerk

9. Date of dispatch of order 7 ITA NO. 1108/ Del/2013