Revenue cannot challenge ITAT orders inconsistently across assessment years after accepting similar tribunal findings

Bombay HC dismissed revenue's appeal involving multiple tax issues. Court held debt write-off disallowance was covered by SC precedent in TRF Limited, raising no substantial question of law. Windmill expenses became non-issue after AO allowed depreciation following ITAT order. Entertainment expenditure and other disallowances were upheld based on assessee's own case precedent for AY 1996-97. HC noted revenue had accepted similar ITAT orders in previous years without challenge, citing Excel Industries SC ruling that revenue cannot raise questions of law inconsistently across assessment years after accepting tribunal findings.

---

---

Issues:
1. Disallowance of expenses written off
2. Write off of investment on windmills
3. Disallowance of deduction claimed on debenture redemption
4. Entertainment expenditure 'food subsidy coupons'
5. Expense related payments to schools
6. Advertisement expenditure (deferred revenue)

Issue 1 - Disallowance of expenses written off:
The Revenue appealed under Section 260A of the Income Tax Act, challenging the ITAT's order on the deletion of expenses written off. The Tribunal relied on the assessee's case for AY 1996-97 and the TRF Limited case, ruling in favor of the assessee. The Respondent argued that the issue was settled by the TRF Limited case and a previous decision of the Bombay High Court. The Court agreed, and the appeal was dismissed.

Issue 2 - Write off of investment on windmills:
The ITAT had sent back the issue of windmill expenses claimed as revenue expenditure to the AO for reconsideration. The Respondent confirmed that the AO had allowed depreciation on windmills, making this issue irrelevant. Both parties agreed, and the Court dismissed this issue.

Issue 3 - Disallowance of deduction claimed on debenture redemption:
The Tribunal directed the CIT(A) to admit an additional ground and decide on the debenture redemption issue. The Respondent informed that the matter was pending before the CIT(A). The Court directed the CIT(A) to resolve the issue within three months for immediate closure due to the prolonged duration of the case.

Issue 4 - Entertainment expenditure 'food subsidy coupons':
The ITAT allowed entertainment expenditure on 'food subsidy coupons,' which the Revenue contested as not covered under section 37(2) of the Income Tax Act. The Court did not find substantial merit in this argument and dismissed the appeal.

Issue 5 - Expense related payments to schools:
The ITAT allowed expense related payments to schools, challenged by the Revenue under section 40A(9) of the Income Tax Act. The Court did not find the challenge substantial and dismissed the appeal.

Issue 6 - Advertisement expenditure (deferred revenue):
The ITAT allowed advertisement expenditure as revenue expenditure, which the Revenue disputed due to differing entries in accounts. The Court referred to the principle of not reopening settled issues unless there is a material change justifying it. As the Revenue had accepted previous decisions in favor of the assessee, the Court dismissed the appeal on this issue.

In conclusion, the High Court of Bombay dismissed the Revenue's appeal under Section 260A of the Income Tax Act, addressing various issues related to expenses written off, windmill investments, debenture redemption, entertainment expenditure, school payments, and advertisement expenditure. The Court upheld the ITAT's decisions based on legal precedents and settled principles, resulting in the dismissal of the appeal with no costs.

---