ITAT rules in favor of assessee on deductions but dismisses appeal on depreciation.

The ITAT allowed the appeals for AY 2008-09 and 2009-10 concerning Section 80IB(11A) deductions for statistical purposes, directing the AO to verify the claims. The appeal on deferred revenue expenditure was also allowed for statistical purposes, instructing the AO to verify the actual expenditure. However, the appeal on depreciation of wooden crates was dismissed, affirming the CIT(A)'s decision. The ITAT ruled in favor of the assessee on Section 80IB(11A) deductions and deferred revenue expenditure, while upholding the CIT(A)'s decision on the depreciation issue.

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Issues Involved:
1. Disallowance of claim of deduction under Section 80IB(11A).
2. Disallowance of claim of deduction of deferred revenue expenditure.
3. Disallowance of claim of depreciation on wooden crates.

Issue-wise Detailed Analysis:

1. Disallowance of Claim of Deduction under Section 80IB(11A):
The assessee, a state government undertaking, claimed deductions under Section 80IB(11A) for the assessment years (AY) 2008-09 and 2009-10. The Assessing Officer (AO) disallowed these claims, arguing that the assessee was only providing storage facilities and not engaged in the integrated business of handling, storage, and transportation of food grains. The AO also noted that the assessee did not start operations on or after April 1, 2001, and failed to maintain separate books of account for the new undertakings. The CIT(A) upheld this disallowance, referencing a previous decision for AY 2007-08. However, the ITAT found that the issue was covered by its earlier decision in the assessee's favor for AYs 2005-06, 2006-07, and 2007-08. The ITAT directed the AO to verify the claim and allow deductions for new undertakings set up after April 1, 2001, following the legislative intent to encourage building storage capacities.

2. Disallowance of Claim of Deduction of Deferred Revenue Expenditure:
The assessee claimed a deduction for actual expenditure incurred on LDP covers, treating it as deferred revenue expenditure in its accounts. The AO allowed only the amount debited to the Profit & Loss Account and not the actual expenditure. The CIT(A) dismissed the ground as the assessee did not make any written submissions. The ITAT remitted the issue back to the AO to verify the actual expenditure incurred and decide accordingly, noting that similar claims had been allowed in previous years.

3. Disallowance of Claim of Depreciation on Wooden Crates:
The AO disallowed part of the depreciation claimed on wooden crates, treating them as plant and machinery eligible for 15% depreciation instead of 100%. The CIT(A) allowed the full depreciation following a previous ITAT order for AY 2003-04 in the assessee's favor. The ITAT upheld the CIT(A)'s decision, noting that an appeal pending before the High Court did not invalidate the ITAT's previous order.

Judgment Summary:
- Appeals for AY 2008-09 and 2009-10 regarding Section 80IB(11A) were allowed for statistical purposes, directing the AO to verify the claims.
- The appeal regarding deferred revenue expenditure was also allowed for statistical purposes, directing the AO to verify the actual expenditure.
- The appeal regarding depreciation on wooden crates was dismissed, upholding the CIT(A)'s decision.

Conclusion:
The ITAT ruled in favor of the assessee on the issues of Section 80IB(11A) deductions and deferred revenue expenditure, directing further verification by the AO. The ITAT dismissed the department's appeal on the depreciation issue, upholding the CIT(A)'s decision based on precedent.

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