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2018 (4) TMI 1822 - AT - Income TaxAssessment u/s 153A - Treatment to sales tax subsidy - revenue or capital receipt - HELD THAT:- issue of sales tax subsidy is covered in favour of the assessee by order of ITAT in assessee’s own favour in earlier assessment years 2007 – 08 and 2008 – 09 [2016 (4) TMI 1320 - ITAT DELHI]. This issue also came up in assessment year 2009 – 10 and the same was decided in favour of the assessee - Also this addition has been made without there being any incriminating material found in respect of this addition during the course of search conducted on the premises of the assessee. Respectfully following the earlier orders of the Tribunal in the assessee’s own case as aforementioned we allow these grounds raised by the assessee. Disallowance of professional charges paid for feasibility study - Tribunal had noted that no new asset had come into existence nor any benefit of enduring nature had resulted for the assessee company and, therefore, the expenditure incurred on feasibility study was to be allowed as revenue expenditure. As nothing new has been brought on record by the Department subsequent to the earlier order of the ITAT and nothing new or incriminating was found during the course of search, we hold that the expenditure incurred on feasibility study is to be allowed as revenue expenditure and accordingly we allow the grounds raised by the assessee in this regard. Disallowance u/s 14A - Admittedly, the assessee had not earned any dividend income during the year under consideration and, therefore, no disallowance under section 14A could be made. It is seen that with respect to this disallowance also nothing incriminating was found during the course of search and, therefore, in absence of any evidence to the contrary being demonstrated by the Department, since the assessee has not earned any dividend income during the year under consideration, we find no reason to interfere with the findings of CIT (Appeals) in this regard and we deem it fit dismiss the grounds raised by the Department. Ad hoc disallowance to the extent of 5% of the total foreign travelling expenses - as per AO disallowance should be restored to 10% of the total expenditure on foreign travelling - HELD THAT:- As no incriminating material has been brought on record in respect of this item of expenditure and this issue has already been settled in favour of the assessee by earlier orders of the ITAT [2016 (4) TMI 1320 - ITAT DELHI]. Consistent with the view taken in earlier orders of the ITAT, the ground raised by the assessee is allowed Addition for scrap sales - addition for the first time in the order passed under section 153A - HELD THAT:- It is settled law that there is no scope for extrapolation in assessment framed under section 153A of the Act and the additions can be made only with reference to incriminating material found during the course of search. This view supported by another judgment in the case of Principal CIT versus Smt. Anita Rani [2017 (3) TMI 389 - DELHI HIGH COURT] - in view of the finding of fact by the Ld. CIT (Appeals) that incriminating material found in respect of the scrap sales amounted to ₹ 20,73,211/- - Decided against revenue.
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