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ITAT Rules in Favor of Assessee: Sales Tax Subsidy Non-Revenue, Allows Feasibility & Travel Expenses, Dismisses Dept Appeals. The ITAT ruled in favor of the assessee, allowing all four appeals concerning assessment years 2009-10 to 2012-13. The ITAT upheld the treatment of sales ...
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ITAT Rules in Favor of Assessee: Sales Tax Subsidy Non-Revenue, Allows Feasibility & Travel Expenses, Dismisses Dept Appeals.
The ITAT ruled in favor of the assessee, allowing all four appeals concerning assessment years 2009-10 to 2012-13. The ITAT upheld the treatment of sales tax subsidy as non-revenue receipt and allowed expenditures on feasibility studies and foreign travel. The Department's appeals were dismissed, including the disallowance under Section 14A and addition related to scrap sales, due to lack of incriminating evidence. The decisions were consistent with prior favorable rulings for the assessee, and the orders were finalized on 27th April 2018.
Issues Involved: - Appeals against separate orders dated 24.04.2015 of the Ld. CIT (Appeals)-25, New Delhi for assessment years 2009-10 to 2012-13. - Treatment of sales tax subsidy as revenue receipt. - Disallowance of payment for feasibility study. - Deletion of disallowance under section 14A of the Income Tax Act. - Confirmation of ad hoc disallowance on foreign traveling expenses. - Deletion of addition related to scrap sales.
Analysis:
Assessment Year 2009-10: - Sales Tax Subsidy: The ITAT decided in favor of the assessee, citing earlier orders in the assessee's favor for assessment years 2007-08 and 2008-09. No incriminating material was found during the search, leading to allowing the grounds raised by the assessee. - Feasibility Study Disallowance: The ITAT noted that no new fact or incriminating material was unearthed during the search, and as the issue was previously settled in favor of the assessee, the expenditure on feasibility study was allowed as revenue expenditure.
Department's Appeal - Disallowance under Section 14A: - The ITAT upheld the deletion of disallowance under section 14A as the assessee had not earned any dividend income during the year, and no incriminating material was found during the search.
Assessment Year 2010-11: - Ad Hoc Disallowance on Foreign Traveling Expenses: The ITAT allowed the ground raised by the assessee, as no incriminating material was found, and the issue had been settled in favor of the assessee in previous assessment years. - Addition related to Scrap Sales: The ITAT dismissed the Department's appeal, as the addition was made on conjectures and surmises without any incriminating evidence found during the search.
Assessment Years 2011-12 and 2012-13: - The issue of ad hoc disallowance on foreign traveling expenses was settled in favor of the assessee by earlier ITAT orders, leading to the allowance of the appeals for both years.
Final Result: - All four appeals of the assessee were allowed, while both appeals of the Department were dismissed, with the orders pronounced on 27th April 2018.
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