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2021 (3) TMI 1373 - AT - Income TaxDisallowance of ISO Expenses - CIT-A deleted the addition - as per AO allowing the entire expenditure in one year might give a very distorted picture of the profits of a particular year since the claim of assessee is in violation of doctrine of matching principles particularly when ISO certifications is valid for various years. - HELD THAT:- We note that these expenses are generally incurred for getting a certification from the International Standardization Organization on a periodical basis for systems and procedures of operations implemented in the organization which are in accordance with the standards laid down by these international bodies. This certificate is basically issued and renewed from time to time to bring forth the fact that the systems and procedures of operations implemented in the organization are in accordance with the standards laid down, therefore it is revenue in nature. We note that by making payments for obtaining ISO 9002 certification, the fixed capital of the company has not enhanced in any manner. It rather created a positive image of the products of the assessee for the smooth conduct of the business. Therefore, the Ld. CIT (A) was justified in treating the entire amount as Revenue in nature. That being so, we decline to interfere in the order passed by Ld. CIT(A), his order on this issue is hereby accepted and grounds of appeal raised by the Revenue is dismissed. Receipt of subsidy under the 50% subsidy ASIDE scheme - Revenue or capital receipt - treated as income of the assessee or not? - subsidy was given towards the administrative expenses incurred during the execution of project for upgradation of infrastructure facilities - as per CIT-A subsidy is capital in nature - HELD THAT:- As clearly mentioned in the sanction letter that the subsidy has been sanctioned for the "Treatment Facility of Effluent Treatment Project for Ankleshwar, Jhagadia and Panoli Industrial Estate.The above components are covered under capital nature and thus, the same has been considered as capital subsidy by ld CIT(A). That being so, we decline to interfere in the order passed by Ld. CIT(A), his order on this issue is hereby accepted and grounds of appeal raised by the Revenue is dismissed.
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