ITAT allowed the assessee's appeal on multiple grounds. The...

ITAT allowed the assessee's appeal on multiple grounds. The Tribunal held that expenditure on moulds and dies constituted revenue expenditure as these items require frequent replacement, noting the department's acceptance of this treatment in subsequent years. Regarding capital investment subsidy from J&K Government, ITAT ruled that Explanation 10 to Section 43(1) was inapplicable as the subsidy aimed at industrial development rather than asset cost subsidization, and Finance Act 2015 amendments were prospective only. Excise duty refund was treated as capital receipt following Supreme Court precedent. On Section 14A disallowance, the matter was remanded to AO for verification of actual exempt income earned during the year. The Tribunal confirmed that Section 14A disallowance should not affect book profit computation under Section 115JB and upheld the assessee's expense allocation method for Section 80-IB deduction, particularly given prior approval by PCIT under Section 263.