Revenue appeal dismissed, assessee's cross objection partly allowed. Disallowance issue remanded for further examination.

The Revenue's appeal was dismissed as the tax effect was below the prescribed limit by CBDT. The assessee's cross objection was partly allowed, with the Tribunal remanding the disallowance issue back to the Assessing Officer for further examination. The delay in filing the Cross Objection was condoned due to genuine reasons. The claim for deduction under section 80-IA(4)(iv)(a) was dismissed for lack of supporting evidence. The disallowance of expenditure claimed as capital expenditure for repairs was overturned, directing it to be treated as revenue expenditure.

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Issues Involved:
1. Disallowance under section 14A of the Income Tax Act.
2. Condonation of delay in filing Cross Objection.
3. Claim of deduction under section 80-IA(4)(iv)(a) of the Act.
4. Disallowance of expenditure claimed as capital expenditure for repairs.

Analysis:

Issue 1: Disallowance under section 14A of the Income Tax Act
The appeal and cross objection pertain to the disallowance under section 14A of the Act. Initially, the assessee determined the disallowance at a certain amount, which was contested during assessment proceedings. The Assessing Officer did not accept the plea, leading to a higher disallowance. However, the CIT(A) ruled in favor of the assessee, reducing the disallowance amount. The Revenue challenged this decision, but due to the tax effect being below the prescribed limit by CBDT, the appeal was dismissed. The assessee, in the cross objection, raised an additional ground regarding the disallowance, which was also considered. The Tribunal admitted the fresh plea raised by the assessee and remanded the matter back to the Assessing Officer for further examination.

Issue 2: Condonation of Delay in Filing Cross Objection
The assessee pointed out a slight delay in filing the Cross Objection, supported by an affidavit explaining the reasons. The delay was considered genuine, and thus, it was condoned by the Tribunal upon the agreement of the Departmental Representative.

Issue 3: Claim of Deduction under section 80-IA(4)(iv)(a) of the Act
The assessee made a fresh claim for deduction under section 80-IA(4)(iv)(a) of the Act, related to profits from a Wind Mill Power project. This claim was not raised before the lower authorities. However, the Tribunal, following the judgment of the Hon'ble Bombay High Court, dismissed the claim as unadmitted due to lack of supporting evidence on record.

Issue 4: Disallowance of Expenditure Claimed as Capital Expenditure for Repairs
Regarding the disallowance of expenditure claimed as capital expenditure for repairs, the Assessing Officer had disallowed it as capital in nature. The CIT(A) upheld this decision, but the Tribunal, after considering the submissions, found that the expenditure was for maintenance and repair of the existing kitchen exhaust system, not for acquiring a new asset. Therefore, the Tribunal directed the Assessing Officer to treat the expenditure as revenue expenditure, allowing the claim made by the assessee.

In conclusion, the appeal of the Revenue was dismissed, and the cross objection of the assessee was partly allowed on different grounds as detailed above.

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