Tax Appeals Outcome: Assessee wins for 2011-12, 2012-13; Revenue partly wins for 2009-10, 2010-11. Revenue loses for 2011-12, 2012-13, 2013-14.

The assessee's appeals for assessment years 2011-12 and 2012-2013 were allowed, while the Revenue's appeals for assessment years 2009-10 and 2010-2011 were partly allowed for statistical purposes. The Revenue's appeals for assessment years 2011-12, 2012-2013, and 2013-2014 were dismissed.

---

---

Issues Involved:

1. Allowability of ESOP expenses as revenue expenditure.
2. Depreciation on intangible assets.
3. Depreciation on additions to leased buildings.
4. Depreciation on electrical installations.
5. Disallowance of foreign exchange loss.
6. Disallowance under Section 14A.
7. Allowability of bad debts and business losses.

Issue-wise Detailed Analysis:

1. Allowability of ESOP Expenses as Revenue Expenditure:
- The Revenue challenged the CIT(A)'s decision to allow ESOP expenses as revenue expenditure, arguing it was notional and capital in nature. The CIT(A) relied on the Hon'ble Jurisdictional High Court in the case of PVP Ventures Ltd. and the Hon'ble Delhi High Court in the case of Lemon Tree Hotel, which held ESOP expenditure as revenue expenditure. The Tribunal upheld CIT(A)'s decision, noting the Hon'ble Supreme Court dismissed the SLP against the High Court's decision, making the law final. Thus, the ESOP expenses were allowed as revenue expenditure for all relevant assessment years.

2. Depreciation on Intangible Assets:
- The CIT(A) directed the AO to allow depreciation on technical knowhow, which was disallowed by the AO in earlier years. The Tribunal noted the Co-ordinate Bench of the Tribunal had dismissed the Revenue's appeal on this issue for earlier years. Consequently, the Tribunal remitted the issue back to the AO to follow the decisions of earlier years, allowing the claim consequentially.

3. Depreciation on Additions to Leased Buildings:
- The Revenue contended the expenditure on leased premises should be capitalized and not allowed as revenue expenditure. The Tribunal, following the Jurisdictional High Court's decisions in CIT vs. ETA Travel Agency (P) Ltd. and CIT vs. Viswams, held that such expenditures should be treated as capital and allowed depreciation at the rate applicable to buildings. The CIT(A)'s decision to allow the expenditure as revenue was reversed, and the AO was directed to allow depreciation accordingly.

4. Depreciation on Electrical Installations:
- The CIT(A) allowed depreciation on electrical installations at the rate applicable to plant and machinery. The Tribunal upheld this decision, noting the AO did not dispute the claim that electrical installations were part of plant and machinery. Thus, the depreciation was allowed at the rate applicable to plant and machinery.

5. Disallowance of Foreign Exchange Loss:
- The AO disallowed the foreign exchange loss claim for lack of evidence. The CIT(A) allowed it as a mark-to-market loss. The Tribunal found the CIT(A) did not consider material evidence and remitted the issue back to the AO for fresh examination.

6. Disallowance under Section 14A:
- The AO made disallowances under Section 14A even when no exempt income was earned. The CIT(A) deleted these disallowances, and the Tribunal upheld this decision, referencing the Hon'ble Jurisdictional High Court's rulings in Redington (India) Ltd. vs. Addl. CIT and CIT vs. Chettinad Logistics P. Ltd., which held that in the absence of exempt income, no disallowance under Section 14A can be made.

7. Allowability of Bad Debts and Business Losses:
- The CIT(A) allowed the claim of bad debts and business losses related to abandoned power projects and advances written off, considering them as revenue expenditure. The Tribunal upheld this decision, noting the advances were made during the course of business and should be allowed as revenue loss if not as bad debts, following precedents set by the Hon'ble Jurisdictional High Court and other High Courts.

Summary of Results:
- The appeals of the assessee for ITA Nos. 1604 & 1740/CHNY/2016 for assessment years 2011-12 and 2012-2013 were allowed.
- The appeals of the Revenue for ITA Nos. 2011 & 2012/CHNY/2016 for assessment years 2009-10 and 2010-2011 were partly allowed for statistical purposes.
- The appeals of the Revenue for ITA Nos. 2013 & 2014, 2744/CHNY/2016 for assessment years 2011-12, 2012-2013, and 2013-2014 were dismissed.

---