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2022 (7) TMI 1498 - AT - Income TaxDisallowance of deferred revenue expenses - HELD THAT - As it appears that the Ld. CIT(A) has decided the issue against the assessee relying upon the order passed by his predecessor in the case of the assessee for A.Y. 2008-09 2015 (9) TMI 1731 - ITAT AHMEDABAD Considering the rule of consistency and the observation made by the Revenue in that year we do not find any reason to interfere in the order impugned before us in the absence of any changed circumstances. Hence the said ground of appeal filed by the assessee is found to be devoid of any merit and thus dismissed. Disallowance of miscellaneous losses and write off - Addition on the ground that the claim has not been substantiated by any documentary evidences - HELD THAT - The issue is duly covered by assessee s own case for A.Y. 2008-09 by the Coordinate Bench 2015 (9) TMI 1731 - ITAT AHMEDABAD which has been perused by us and since the facts are identical we find substances in assessee s submissions which has not been able to be controverted by the Ld. D.R. too. Hence this ground of appeal is allowed in assessee s favour by deleting the addition made by the Revenue. Income recognition on government grant subsidy - Addition of 15% of Capital Grants as against 10% offered by assessee - HELD THAT - We find that on the identical issue as submitted by the Ld. A.R. for A.Y. 2009-10 the Coordinate Bench has been pleased to set-aside the issue to the file of the Ld. AO for adjudication afresh for verifying the proportionate amount of grant relevant to different asset - Thus we find it fit and proper to remand the issue to the file of the Ld. AO for re-adjudication of the same and to pass orders upon verification of the proportionate amount of grant relating to different assets and to pass orders accordingly. This ground of appeal preferred by the assessee is allowed for statistical purposes. Correct head of income - Confirming income as other income instead of business income interest on loans to staff - HELD THAT - In that view of the matter we find it fit and proper to direct the Ld. AO to consider the issue afresh upon examining the same in regard to the head of income upon considering the relevant evidence in the light of the observation made in Odisha Power Generation Corporation Ltd. 2022 (3) TMI 539 - ORISSA HIGH COURT . We thus pass order accordingly. This ground is allowed for statistical purposes. Disallowance of prior period expenses - HELD THAT - Coordinate Bench 2017 (5) TMI 1718 - ITAT AHMEDABAD for A.Y. 1998-99 has set-aside the identical issue to the file of the Ld. AO. We are disposing of the ground by setting aside the issue to the file of the Ld. AO for de novo adjudication upon giving an opportunity of being heard to the assessee and upon considering the evidence which the assessee may choose to file at the time of hearing of the matter. This ground is allowed for statistical purposes. Computation of brought forward business and depreciation loss - HELD THAT - We find that the Ld. CIT(A) has not decided the issue of carry forward loss and depreciation of earlier years hence we find it fit and proper to remit to the issue to the file of the Ld. AO to decide the same on the basis of the giving effect of appellate orders in respect of the earlier years of the assessee. This ground of appeal raised by the assessee is allowed for statistical purposes. Nature of expenses - Guarantee fees paid to the Government of Gujarat - disallowance was made by disallowing the claim as revenue expenditure as it is of enduring nature in the assessee s business and hence capital in nature - HELD THAT - As relying on for A.Y. 2008-09 in assessee s own case 2021 (7) TMI 1181 - ITAT AHMEDABAD reason to interfere of the order passed by the Ld. CIT(A) in deleting the guarantee fees paid to the Government of Gujarat. The ground preferred by Revenue is therefore fails and thus dismissed. Addition of loss due to flood cyclone fire etc. - AO stated the sole ground for rejecting the claim in question to lack of evidence - HELD THAT - As decided in own case 2015 (9) TMI 1731 - ITAT AHMEDABAD for A.Y. 2008-09 lower appellate order mentions very clearly that the assessee had duly filed a letter dated 15-12-2012 comprising of all necessary details; division-wise on expenses towards flood related damages. The Revenue does not produce on record copy of the above stated letter so as to dispel the above said specific findings. The CIT(A) further relies on an identical order dealing with the very claim. The same has also gone un-rebutted in course of hearing before us. We decide this ground as well against the Revenue. MAT computation - addition/adjustment made to the Book Profit computed u/s 115JB on account of Capital Grants claimed - HELD THAT - We find it fit and proper to remit the issue to the file of the Ld. AO to adjudicating the issue taking into consideration the Capital Grant and subsidies and consumers contribution made by the assessee and pass orders in accordance with law upon granting a reasonable opportunity of being heard to the assessee. This ground of appeal preferred by the Revenue is allowed for statistical purposes.
Issues Involved:
1. Disallowance of deferred revenue expenses. 2. Disallowance of miscellaneous losses and write-offs. 3. Addition of Capital Grants & Subsidies and Consumers' Contribution. 4. Classification of income under "Other Income" instead of business income. 5. Disallowance of prior period expenses. 6. Initiation of penalty proceedings under section 271(1)(c). 7. Deletion of guarantee fees paid to the Government of Gujarat. 8. Deletion of loss due to flood, cyclone, fire, etc. 9. Addition/adjustment to Book Profit under Section 115JB on account of Capital Grants. Detailed Analysis: 1. Disallowance of Deferred Revenue Expenses: The assessee's claim of Rs. 41.16 lakhs as deferred revenue expenditure was disallowed by the AO and confirmed by the CIT(A), citing the rule of consistency based on a previous decision for A.Y. 2008-09. The tribunal found no reason to interfere with this decision due to the absence of changed circumstances and dismissed the ground of appeal. 2. Disallowance of Miscellaneous Losses and Write-offs: The AO disallowed Rs. 3,81,36,000/- due to lack of documentary evidence. The assessee provided a detailed breakdown of the expenses and argued that these were revenue expenses. The tribunal found the issue covered by a previous decision in the assessee's favor for A.Y. 2008-09 and allowed the appeal, deleting the addition made by the Revenue. 3. Addition of Capital Grants & Subsidies and Consumers' Contribution: The AO added 15% of the total grants/subsidies/consumer contribution to the income, which was confirmed by the CIT(A). The tribunal remanded the issue to the AO for re-adjudication, directing verification of the proportionate amount of grant relating to different assets, applying the actual rate of depreciation. 4. Classification of Income under "Other Income": The AO classified Rs. 19,08,000/- as "Other Income" instead of business income, disallowing the set-off of business losses. The tribunal directed the AO to reconsider the issue, taking into account the relevant evidence and the observation made by the Orissa High Court in a similar case. 5. Disallowance of Prior Period Expenses: The AO disallowed Rs. 1,49,95,000/- as prior period expenses. The tribunal remanded the issue to the AO for de novo adjudication, directing verification of the evidence and considering the bona fides of the assessee. 6. Initiation of Penalty Proceedings under Section 271(1)(c): The assessee did not press this ground, and it was dismissed as not pressed. 7. Deletion of Guarantee Fees Paid to the Government of Gujarat: The AO's addition of Rs. 1,00,26,006/- as capital expenditure was deleted by the CIT(A), and the tribunal upheld this decision, citing a previous decision in the assessee's favor for A.Y. 2008-09. 8. Deletion of Loss Due to Flood, Cyclone, Fire, etc.: The AO disallowed Rs. 27,58,000/- for lack of supportive evidence. The tribunal upheld the CIT(A)'s deletion of this addition, referencing a previous decision in the assessee's favor for A.Y. 2008-09. 9. Addition/Adjustment to Book Profit under Section 115JB: The AO added Rs. 37,07,37,000/- to the Book Profit on account of Capital Grants. The CIT(A) deleted this addition, and the tribunal remanded the issue to the AO for re-adjudication, directing verification of the Capital Grant and subsidies and consumers' contribution. Conclusion: The appeals preferred by the assessee were partly allowed, and the appeals preferred by the Revenue were dismissed. The tribunal provided detailed directions for re-adjudication on several issues, emphasizing the need for verification and consistency with previous decisions.
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