आयकर अपीलीय अधिकरण,’डी’ न्यायपीठ, चेन्नई।

IN THE INCOME TAX APPELLATE TRIBUNAL ‘D’ BENCH: CHENNAI माननीय श्री मनु कु मार धिरर ,न्याधयक सदस्य एवं माननीय श्री अमिताभ शुक्ला , लेखा सदस्य के सिक्ष BEFORE HON’BLE SHRI MANU KUMAR GIRI, JUDICIAL MEMBER AND HON’BLE SHRI AMITABH SHUKLA, ACCOUNTANT MEMBER आयकर अपील सं./ ITA No.265/Chny/2025, Assessment Years: 2014-15 आयकर अपील सं./ ITA No.266/Chny/2025, Assessment Years: 2015-16 आयकर अपील सं./ ITA No.267/Chny/2025, Assessment Years: 2016-17 Joint Commissioner of Income M/s. CRI Pumps Private Limited, Tax(OSD), No.7/46-1, Keeranatham Road, Corporate Circle-1, Saravanampatty Post, Coimbatore. Coimbatore, Tamil Nadu- 641 035. [PAN: AAACC9497N]

(अपीलार्थी/Appellant) (

प्रत्यर्थी

/Respondent)

अपीलार्थी की ओर से/ Assessee by : Shri N. Arjun Raj, Advocate प्रत्यर्थी की ओर से /Revenue by : Shri Saujanya Ranjan, IRS सुनवाई की तारीख/Date of Hearing : 06.05.2025 घोषणा की तारीख /Date of Pronouncement : 07.05.2025 आदेश / O R D E R PER BENCH:

The below mentioned three appeals have been filed by the appellant Revenue for AY-2014-15 to AY-2016-17 contesting the order of Ld. First Appellate Authority indicated Column-E, herein below:-

All the above appeals are centering around common issues and hence for the purposes of convenience were heard and are adjudicated together.

2.0 The first common issue raised by the Revenue in ITA No.265, 266 & 267 for AY-2014-15 to 2016-17 is regarding the action of the Ld.CIT(A) in deleting the addition made by the Ld. AO on account of Royalty payment u/s 40A(2)(a) of the Act. The appellant revenue has conceded that the addition to all the three years is resting on identical facts . Therefore , as the issue is common to all the three years and is resting on identical facts, we will consider the figures for the AY-2015-16 as lead year. The decision of AY-2015-16 shall apply mutatis mutandis in both the ITA 265 & 267 also.

3.0 The Ld. DR relied upon the order of the Ld.AO for the reasons mentioned therein.

4.0 The Ld. Counsel for the assessee submitted that the Ld.AO had made an addition of Rs.4,35,41,770/- on account of Royalty payment to M/s.CRI amalgamation private limited being the holding company, for use of trade mark “CRI”. The Ld. AO had premised that assessee was the owner of the trade mark for more than three decades and therefore the payment of Royalty was not in order. The Ld. Counsel submitted that the Ld. AO had rejected their arguments that the impugned trade mark was vesting with M/s.CRI amalgamation private limited and that the assessee was only using it. The Ld. AR submitted that the trade mark had actually been transferred from the assessee to M/s.CRI amalgamation private limited by way of a family settlement.

5.0 The Ld. Counsel argued that the Ld CIT (A) has discussed the issue vividly in para 4.2 on page 14 of his order. The Ld. CIT(A) deleted the addition by relying upon the decision of this tribunal in its own case for AY-2013-14 dated 18.11.2022 in ITA No.430/Chny/2018.

6.0 We have heard rival submissions in the light of material available on records. We have noted with deference the decision of this tribunal in assessee’s own case for AY-2013-14 dated 18.11.2022 in ITA No.430/Chny/2018. In the impugned case, the Hon’ble Coordinate Bench of this tribunal held as under:-

“….We have heard both the parties, perused materials available on record and gone through orders of the authorities below. We find that an identical issue had been considered by the Tribunal in assessee’s own case for assessment year 200809 in ITA No. 1246/Mds/2012, where the Tribunal considering relevant agreement between the parties, for payment of royalty to holding company for using brand name CRI and also by following certain judicial precedence including the decision of Hon’ble Madras High Court in the Scheme of Amalgamation between group companies including assessee, held that royalty paid by the assessee is of revenue in nature, which is an allowable expenditure. The relevant findings of