The Income Tax Appellate Tribunal, Delhi Bench, dismissed the appeals filed by the Revenue and upheld the order of the Commissioner of Income Tax (Appeals) granting relief to the assessee for Assessment Years 2013-14 and 2018-19. The Tribunal held that prior period expenses in the nature of customer discounts were allowable where the liability was crystallised during the relevant assessment year and no claim had been made in earlier years, notwithstanding their classification as prior period items. It further held that the Assessing Officer was not justified in reducing the deduction claimed under Section 80-IA by allocating indirect expenses on an ad hoc basis, particularly when the assessee maintained separate audited books of account for the power-generating units and no such expenses were actually incurred. The Tribunal also affirmed the finding of the CIT(A) that excise duty subsidy, GST subsidy, and incentives received under the Merchandise Exports from India Scheme constituted capital receipts, as they were granted with the object of industrial development, employment generation, and promotion of exports. Rejecting the Revenue’s objection regarding admission of additional grounds, the Tribunal held that the CIT(A) possesses co-terminous powers under Section 250(4) of the Act to admit and adjudicate fresh claims, and that such exercise of power was in accordance with law and supported by binding judicial precedents. Accordingly, the orders of the CIT(A) were upheld and the appeals of the Revenue were dismissed.

SOURCE LINK

https://itat.gov.in/public/files/upload/1768197248-uFKr7P-1-TO.pdf

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