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2013 (2) TMI 321 - AT - Income TaxPersonal expenses - Section 37(1) - Disallowance part of Telephone expenses - Travelling expenses - Vehicle maintenance – Personal expenditure – Held that:- These disallowances were made by the A.O. on the ground that personal use of the facility cannot be ruled out. No specific defect showing that concerned expenditure was incurred for personal use of the assessee has been pointed out by the A.O. The additions in this regard are only on estimate basis without any dollop of cogency – In favour of assessee Nature of incentive subsidy - Capital or revenue receipt - subsidy from the Haryana State Government on the purchase of generator set – A.O. opined that assessee was required to reduce the cost of generator set by this amount and then claim the depreciation on the balance amount – Held that:- Following the decision in case of Ponni Sugars & Chemicals Ltd. (2008 (9) TMI 14 - SUPREME COURT) the subsidy in the case was granted by the State Government on the purchase of generator set. Hence, the same is capital subsidy and should go on to reduce the cost of asset – In favour of assessee The case law from the Apex court in the case of P.J. Chemicals (1994 (9) TMI 1 - SUPREME COURT) is also not applicable on the facts of the case. In the said case the subsidy was with reference to a percentage of capital cost, which is not the case here.
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