2020 (5) TMI 45 - AT - Income Tax

Nature of expenditure - Expenses relating to technical know-how - Revenue or capital expenditure - HELD THAT:- An identical issue having similar facts has already been adjudicated by this Bench of ITAT in assessee’s own case [2019 (6) TMI 655 - ITAT CHANDIGARH] wherein rightly allowed the assessee’s appeal following the order of the I .T.A.T. in assessee’s own case for assessment year 2009-10. We therefore find no reason to interfere in the order of the Ld.CIT(A) holding the technical knowhow expenses as revenue in nature.

Sales tax subsidy received by the assessee by virtue of scheme of Punjab Government has already been decided by the I .T.A.T. in the case of the assessee itself in the preceding years [2019 (6) TMI 655 - ITAT CHANDIGARH] holding the same to be capital in nature and with no distinguishing facts having been brought to our notice by the Ld. DR

Characterization of Income - Electricity duty exemption - revenue receipt OR Capital receipt - HELD THAT:- In the present case it is not in dispute that the assessee in view of Industrial Policy 2003 of the State Government of Punjab became eligible for claiming the electricity duty exemption - claim of the assessee was that the said entitlement although accrued but had not been received during the year under consideration, as the case of the assessee was to be examined by a separate Empowered Committee constituted by the State Government.

Claim of the assessee that due to pendency of verification of compliance of eligibility condition the assessee had not even filed its claim before the Department for benefit of exemption. The said claims of the assessee are not rebutted by bringing cogent material on record, therefore the electricity duty exemption entitlement although booked in the books of accounts on estimate basis was rightly reduced from the taxable income while filing the Income Tax Return.

Assessee was eligible for the incentive on the basis of Industrial Policy 2003 of Government of Punjab on account of expansion of the existing unit and it shall be received by the assessee by way of adjustment in electricity bills of future consumption. Assessee had not received any benefit by way of adjustment or reimbursement for the year under consideration, so it was a hypothetical income which may or may not materialize to its money value. Therefore, the addition made by the A.O. and sustained by the Ld. CIT(A) was not justified, accordingly the same is deleted. Assessee appeal allowed.