Case Law Details
ACIT Vs Setco Automobiles (ITAT Ahmedabad)
In the present case, the issue is about allowability of product development expenses which were held by A.O. be a capital in nature. We find that ld. CIT(A) while deciding the appeal for A.Y. 2002-03 and following it has given a finding that due to incurring of product development expenses, the installation capacity did not increase and assessee did not set up a separate and independent unit from manufacturing and no capital asset was brought into existence. He has further held that entries in the books of account wee not determinative of the allowability or otherwise of the expenditure.
We also note that the ld. DR has not brought anything on record suggesting that there was any benefit of enduring nature or any new assets coming into existence out of such expenses. Accordingly, we hold that such expenses are of revenue in nature but subject to verification of the AO as held by the Learned CIT-(A). Hence, we uphold the finding of the Learned CIT-(A). Thus, the ground of appeal of the Revenue is dismissed.
Full Text of the ITAT Judgment
Both the appeals have been filed by the Revenue for A.Ys. 2013-14 & 2014-15 which are arising from the order of the CIT(A)-4,Vadodaradated 16.08.2018, in the proceedings under Section 143(3) r.w.s 144C(3)& 143(3) of the Income Tax Act, 1961 (in short “the Act”).
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