$ 38 * IN HIGH COURT OF DELHI AT NEW DELHI % Judgment delivered on: 05.11.2015 + ITA 818/2015 PR. COMMISSIONER OF INCOME TAX-06 .... Appellant versus MC DONALD S INDIA (P) LTD. ..... Respondent Advocates who appeared in this case: For Appellant : Mr Rahul Chaudhary with Mr Ruchir Bhatia, Advocates. For Respondent : Mr Pawan Kumar, Advocate. CORAM:- HON BLE MR JUSTICE BADAR DURREZ AHMED HON BLE MR JUSTICE SANJEEV SACHDEVA JUDGMENT BADAR DURREZ AHMED, J (ORAL) 1. This appeal has been preferred by Revenue against order dated 18.03.2015 passed by Income Tax Appellate Tribunal in ITA No.960/DEL/2010 pertaining to Assessment Year 2003-04. issue sought to be raised by Revenue is with regard to franchise fee. learned counsel for Revenue pointed out that assessee was collecting franchise fee from Joint Venture Companies @ USD 45,000 under Master Licence Agreement with its parent company McDonald s Corporation USA. 2. It was submitted by learned counsel for appellant that earlier assessee was collecting franchise fee of USD 45,000 and was remitting same to its parent company. But, in year in question, franchise fee that it was collecting from Joint Venture Companies in India was reduced to USD 22,500 while, at same time, it was remitting USD 45,000 to parent Company. This, according to him, meant that assessee was depressing its ITA No.818/2015 Page 1 of 3 income by showing expenditure of USD 45,000 as against its income USD 22,500 in respect of each franchisee. 3. learned counsel for respondent is present on advance notice. He has pointed out that in year in question, no remittances were made to parent Company because there was embargo placed by Government. Therefore, far from claiming expenditure of USD 45,000, it did not claim even expenditure in respect of USD 22,500 that it had received from its Joint Venture Companies. It was also further contended that Tribunal as also CIT (A) have returned findings of fact that assessee/respondent was only receiving USD 22,500 from Joint Venture Companies and not USD 45,000, as contended by Revenue. 4. We have examined impugned order as also order passed by CIT (A) and Assessing Officer. We note that Tribunal which is final fact finding authority in hierarchy of authorities under Income Tax Act has returned clear finding as under:- 7.2 All these agreements read with correspondence clearly show that assessee was entitled to USD 22,500 and not USD 45,000 during FY 2002-03. Ld. Standing Counsel has submitted that there could not be any unilateral amendment to Franchisee agreement. However, contents of letter dated 8-12- 2002, reproduced above, clearly show that amendment was effective after discussions with reference to licence and location fees. memorandum was accordingly entered into. There was no novation of contract and it was only change in payment of fee to assessee. 7.3 Ld. Standing Counsel has referred to covenant 26 of Master License Agreement as well as Franchisee agreement to submit that modification ITA No.818/2015 Page 2 of 3 of Franchisee agreement could be only as agreed upon. In this regard we find that term duly executed in case of implies that same is executed by officer of Franchiser or its Franchiser director and in case of Franchisee executed by Franchisee. communication contained at page 68, in our opinion, confirmed to both conditions because same has been addressed to Franchisee by Franchiser. We accordingly, do not find any reason to interfere with order of ld. CIT (A) to extent that since no real income accrued to assessee, no addition was called for. Ground is dismissed. 5. Therefore finding is that assessee has received only USD 22,500 and not USD 45,000 during period in question. Apart from this, it is also noted in paragraph 7 of impugned order that assessee could not remit even this amount of USD 22,500 to parent Company because of embargo placed by Government. Therefore, there is no factual basis for submission made by learned counsel for Revenue that assessee was, on one hand, receiving USD 22,500 from Joint Venture Companies and, on other hand, was remitting USD 45,000 to its parent Company. 6. No perversity has been pointed out in findings of fact returned by CIT (A) as also Income Tax Appellate Tribunal. In our view, no question of law, what to speak of substantial question of law, arises for our consideration. 7. appeal is dismissed. BADAR DURREZ AHMED, J SANJEEV SACHDEVA, J NOVEMBER 05, 2015/st ITA No.818/2015 Page 3 of 3 PR. COMMISSIONER OF INCOME TAX-06 v. MC DONALD’S INDIA (P) LTD