9911796707
TMI Blog2021 (3) TMI 1373X X X X Extracts X X X X X X X X Extracts X X X X ..... in accordance with the standards laid down by these international bodies. This certificate is basically issued and renewed from time to time to bring forth the fact that the systems and procedures of operations implemented in the organization are in accordance with the standards laid down, therefore it is revenue in nature. We note that by making payments for obtaining ISO 9002 certification, the fixed capital of the company has not enhanced in any manner. It rather created a positive image of the products of the assessee for the smooth conduct of the business. Therefore, the Ld. CIT (A) was justified in treating the entire amount as Revenue in nature. That being so, we decline to interfere in the order passed by Ld. CIT(A), his order o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (in short the AO) under section 143(3) of the Income Tax Act, 1961 [hereinafter referred to as the Act ] dated 11.03.2013. 2. Grounds of appeal raised by the Revenue are as follows: 1. On the facts and in the circumstances of the case and in law, the learned CIT(A) erred in deleting disallowance of Rs.27,39,668/- out of ISO expenses, ignoring the fact that allowing the entire expenditure in one year might give a very distorted picture of the profits of a particular year since the claim of assessee is in violation of doctrine of matching principles particularly when ISO certifications is valid for various years. 2. On the facts and in the circumstances of the case and in law, the learned CIT(A) erred in deleting disallowance Rs.3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tificates is a benefit of enduring in nature and hence the entire amount cannot be allowed. Therefore, 10% of Rs.26,90,000/- ISO Certification of Member Industries and Rs.3,54,076/- ISO Certification of Audit which worked out by Assessing Officer at Rs.3,04,407/- [10% of (26,90,000 + 3,54,076)] was allowed for the year under consideration and the balance amount of Rs.27,39,668/- was disallowed and added back to the total income of the assessee company. 5. Aggrieved by the order of the Assessing Officer, the assessee carried the matter in appeal before the ld. CIT(A) who has deleted the addition made by the Assessing Officer, observing as follows: 5.2 I have given my careful consideration to the facts of the case as also the observati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd procedures of operations implemented in the organization which are in accordance with the standards laid down by these international bodies. This certificate is basically issued and renewed from time to time to bring forth the fact that the systems and procedures of operations implemented in the organization are in accordance with the standards laid down, therefore it is revenue in nature. We note that by making payments for obtaining ISO 9002 certification, the fixed capital of the company has not enhanced in any manner. It rather created a positive image of the products of the assessee for the smooth conduct of the business. Therefore, the Ld. CIT (A) was justified in treating the entire amount as Revenue in nature. That being so, we d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore the ld. CIT(A) who has deleted the addition made by the Assessing Officer observing as follows: 7.2 I have given my careful consideration to the facts of the case as also the observation of the AO and the arguments put forth by the AR of the appellant. The AO has misunderstood the facts of the case. From the facts recorded in the assessment order itself and the documents filed by the appellant it is clear that the subsidy of Rs.3,87,00,000 has been given to the appellant towards administrative expenses being incurred for expansion of the capacity of the infrastructure facility from 40 MLD to 60 MLD. Therefore, the subsidy is capital in nature. Addition of Rs.3,87,00,000 made by the AO is hereby deleted. 12. Aggrieved by the orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Effluent Treatment Project for Ankleshwar, Jhagadia and Panoli Industrial Estate. The following is the components of the Sanctioned subsidy: (Rs. In lacs) Civil work for plant M/c. 1962.16 Mechanical Electrical Equipments 1194.00 Contingency 157.84 Total 3314.00 The above components are covered under capital nature and thus, the same has been considered as capital subsidy by ld CIT(A). That being so, we decline to interfere in the order passed by Ld. CIT(A), his order on this issue is hereby accepted and grounds of appeal raised by th ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
