Tribunal dismisses appeals on Trademark Fees but upholds addition for delayed PF & ESI contributions

The Tribunal dismissed both the Revenue's and assessee's appeals. The disallowance of Trademark License Utilisation Fees was deleted, emphasizing no dispute on ownership and royalty payments. The addition of delayed payment of Employees' contribution to P.F. & E.S.I.C. was upheld, aligning with legal precedents despite the assessee's reliance on Section 43B.

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Issues:
1. Disallowance of Trademark License Utilisation Fees by the Revenue.
2. Addition of delayed payment of Employees' contribution to P.F. & E.S.I.C. by the Assessing Officer.

Analysis:
1. The Revenue contended that the disallowance of Trademark License Utilisation Fees should not have been deleted by the CIT(A). The Tribunal noted that the issue of disallowance of these fees was consistent in previous assessment years as well. The assessee had paid a significant amount as trade mark license utilization fees, claiming it as revenue expenses, while the Assessing Officer treated it as a capital asset acquisition payment. The Tribunal, based on earlier decisions, upheld the CIT(A)'s decision to delete the addition, emphasizing that there was no dispute regarding the ownership of the trademark and the payment of royalty as per the agreement. The Tribunal dismissed the Revenue's appeal, affirming the CIT(A)'s decision.

2. The assessee's appeal regarding the addition of delayed payment of Employees' contribution to P.F. & E.S.I.C. was based on the argument that Section 43B should apply, citing a decision by the Karnataka High Court. However, the Tribunal referred to a decision by the Jurisdictional High Court in another case, CIT vs. Gujarat State Road Transport Corporation, which was unfavorable to the assessee's position. Consequently, the Tribunal dismissed the assessee's appeal, aligning with the High Court's decision.

In conclusion, both the Revenue's and assessee's appeals were dismissed by the Tribunal, with the disallowance of Trademark License Utilisation Fees being deleted, and the addition of delayed payment of Employees' contribution to P.F. & E.S.I.C. being upheld based on relevant legal precedents.

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