Tribunal Upholds Revenue's Appeals Dismissal

The Tribunal dismissed both appeals filed by the Revenue. For the assessment year 2013-14, the disallowance of construction costs on leasehold land was deemed revenue expenditure based on legal precedents. In the assessment year 2016-17, the incentive for exploring new markets was considered a capital receipt in line with previous decisions and legal principles. The Tribunal upheld the lower authority's decisions in both cases.

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Issues:
1. Disallowance of cost of construction of the building on leasehold land for assessment year 2013-14.
2. Whether the incentive received from the Government for exploring new market is a capital receipt or revenue receipt for assessment year 2016-17.

Detailed Analysis:
1. For the assessment year 2013-14, the issue was the disallowance of the cost of construction of a building on leasehold land. The Departmental Representative argued that the expenditure was capital in nature, while the assessee's representative contended that the expenditure should be allowed as revenue in nature based on judgments of the Madras High Court and the Supreme Court. The Tribunal found that the facts of the case were similar to those in the judgments cited. The Apex Court's test for distinguishing between capital and revenue expenditure was applied, concluding that the expenditure was revenue in nature. The Madras High Court's judgment also supported this view, emphasizing that the construction cost was admissible as revenue expenditure. Therefore, the Tribunal confirmed the lower authority's order.

2. Moving on to the assessment year 2016-17, the issue was whether the incentive received from the Government for exploring new markets was a capital or revenue receipt. Referring to a previous Tribunal order and Circular No.564, the Tribunal noted that the incentive was for exploring new markets globally. Following the Apex Court's principle that subsidies enabling business profitability are revenue receipts, while those for setting up or expanding units are capital receipts, the Tribunal determined that the incentive for market exploration was a capital receipt. Since this view was consistent with previous orders, the Tribunal confirmed the lower authority's decision.

In conclusion, both appeals filed by the Revenue were dismissed by the Tribunal based on the detailed analysis and application of relevant legal principles and judgments.

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