2011 (2) TMI 1404 - AT - Income Tax

Summary

Issues involved: Appeals by Revenue for Assessment Years 2005-06 & 2006-07 regarding deletion of addition of development expenses.

Summary:
1. The appeals by the Revenue for the Assessment Years 2005-06 & 2006-07 were consolidated as they involved identical issues of deletion of addition of development expenses.
2. The A.O. disallowed development expenses following the order for the Assessment Year 2003-04, but Ld. CIT(A) deleted the addition in both years following the decision of ITAT for the Assessment Year 2002-03.
3. During the hearing, Ld. A.R. for the assessee argued that the issue is covered by the decision of ITAT Delhi Bench for the Assessment Year 2002-03, while Ld. Sr. DR supported the A.O.'s order.
4. ITAT Delhi Bench "C" in a previous case deleted the addition of development expenses, stating that the expenses were routine business expenses and allowable as revenue expenditure based on the unity and interconnection of various aspects of the business.
5. Referring to previous tribunal decisions, the current tribunal confirmed the order of Ld. CIT(A) for both years, as the issue was covered by earlier decisions in favor of the assessee.
6. Consequently, the appeals filed by the Revenue for both years were dismissed, and the order of Ld. CIT(A) was upheld based on the precedents set by previous tribunal decisions.

*Pronounced in the open court on 25th Feb., 2011.*