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TMI Blog2023 (7) TMI 1424X X X X Extracts X X X X X X X X Extracts X X X X ..... . In light of the Bangalore Bench of the Tribunal s decision in assessee s own case for AY 2014-15 (supra), we affirm the CIT (A) s order on the deletion of disallowance. Nature of expenses - expenditure of towards propagation of renewable energy programmes and expenses for inauguration of Solar Park at Pavagada - Revenue or capital expenditure - HELD THAT:- It is an admitted fact that the assessee is into the core activity of propagating renewable energy programmes since March, 1996, and is a nodal agency of Government of Karnataka. In propagation of renewable energy, the assessee had incurred expenditure for publishing advertisement in newspaper for popularization of renewable energy. CIT (A), after going through the Board s approval for incurring the expenditure and also the ledger account, bills, etc., had allowed the claim of the expenditure as revenue in nature. CIT (A) has also found the inauguration function of 600MW capacity at Pavagada Solar Park is an expenditure incurred which is in the revenue field. The above finding of the CIT (A) is factual in nature which was not controverted by the Revenue. Accordingly, we affirm the order of the CIT (A) on this issue. X X X X Extracts X X X X X X X X Extracts X X X X ..... iture incurred prior to commencement of business claimed as inaugural function when these items of expenditure are need to be capitalized as being capital in nature. Hence, not an allowable expenditure. vii. The other grounds may be urged at the time of hearing it is prayed that the order of Ld. CIT (A) in so far as it related to above grounds may be reversed and that of AO may be restored. viii. The appellant craves, leaves to add, alter, amend and or delete any of the grounds that may be urged. 3. Grounds i, vii and viii are general in nature and no specific adjudication is called for. Hence, the same are dismissed. The surviving grounds / issues viz., grounds ii to vi are adjudicated hereunder by referring to facts pertaining to Assessment Year 2018-19. 4. Grounds ii and iii (addition of Rs. 22,38,21,592/-). Assessee is a company established by the Government of Karnataka. It is engaged in the business of exploitation of non-conventional energy. For the Assessment Year 2018-19, the return of income was filed on 27.09.2018 declaring total income of Rs. 54,93,38,750/-. The assessee had invested the unutilized funds earmarked under the Government of Karnataka project fun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the material on record. On identical issue, the Bangalore Bench of the Tribunal in assessee's own case for Assessment Year 2014-15 (supra) had decided the issue in favour of the assessee and had deleted the disallowance made. In light of the Bangalore Bench of the Tribunal's decision in assessee's own case for Assessment Year 2014-15 (supra), we affirm the CIT (A)'s order on the deletion of disallowance of Rs. 16,81,954/-. It is ordered accordingly. 14. Ground No. vi (Disallowance of expenses of Rs. 1,82,80,555/- by holding the same to be capital expenditure) The assessee had claimed expenditure of Rs. 1,82,80,555/- towards propagation of renewable energy programmes and expenses for inauguration of Solar Park at Pavagada. The AO had disallowed the claim of expenditure on the ground that the same was capital in nature and assessee failed to prove that these expenditures have been incurred wholly and exclusively for the business purposes. 15. Aggrieved, the assessee has raised this issue before the FAA. The CIT (A) decided the issue in favour of the assessee by holding that the expenditure claimed amounting to Rs. 1,82,80,555/- is to be allowed as a revenue expenditure. The CIT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ied in giving relief to the assessee on the ground of addition made on interest received on FDs of Rs. 2,76,73,508/- by relying on the decision of Hon'ble High Court of Karnataka in the case of CIT vs of M/s Karnataka State Agricultural Produce Processing and Export Corporation Limited for the A.Y 2008-09, which is not accepted by the Department and further appeal is pending as SLP before the Hon'ble Supreme Court. iii. Whether on the facts and circumstances of the case, the Ld. CIT (A) ought to have appreciated that the assessee is receiving interest on FDs which are made out of grants received from GOK and it does not become the grants itself Therefore, the interest on such FDs have rightly been taxed as income. iv. Whether on the facts and circumstances of the case, the Ld. CIT (A) was justified in giving a finding that the expenditure incurred on solar and other renewable devices and other items are business expenditure when these items of expenditure are incurred out of grant in aid from GOK, hence not an allowable expenditure. v. Whether on the facts and circumstances of the case the Ld. CIT (A) ought to have appreciated that the assessee has not offered any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant in aid from GOK, hence not an allowable expenditure. v. Whether on the facts and circumstances of the case the Ld. CIT (A) ought to have appreciated that the assessee has not offered any income out of above item of expenditure mentioned in the table at page-4& 5 of his order. Hence, relief should not be granted. vi. For these and other grounds may be urged at the time of hearing it is prayed that the order of Ld. CIT (A) in so far as it related to above grounds may be reversed and that of AO may be restored. vii. The appellant craves, leaves to add, alter, amend and or delete any of the grounds that may be urged. 25. In the above appeal, ground Nos. i, vi and vii are general in nature and no specific adjudication is called for, hence, the same are dismissed. Ground Nos. ii and iii relates to the issue of addition made on interest income received on fixed deposits. For our reasoning mentioned in paragraph 8 (supra) in appeal No. 389/Bang/2023 for Assessment Year 2018-19, grounds ii and iii raised in ITA No. 397/Bang/2023 are dismissed. 26. The grounds iv and v relates to the issue of disallowance of expenditure amounting to Rs. 8,30,631/-. For our reasoning mentioned ..... X X X X Extracts X X X X X X X X Extracts X X X X
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