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2013 (9) TMI 961 - ALLAHABAD HIGH COURTDepreciation on spare parts u/s 32 of the Income tax act – Whether spares can be capitalized and depreciation claimed on it even when they are not used – Held that:- Accounts were maintained as per the accounting standard II issued by the Institute of Chartered Accountants of India, and the said standard is mandatory for all the companies. Hence, the assessee has capitalized the value of spare parts along with the equipments. The spare parts were supplied along with the equipments to keep the same in workable conditions. It may be mentioned that the spare parts cannot be utilized independently and the same will have to be used along with the equipments. When the depreciation is allowed on the equipments, then it is also allowable on its spare parts – Decided against the Revenue. Addition towards short provision of interest on Government loan for Financial Year 2001-02 and towards short provision of DA arrears of employees – Held that:- Section 43B is not applicable to the interest on government loans and for DA arrears of employees. If the liability had finalized in the year under consideration, then the same would be allowed. The short fall in the provision was pointed out by the AG Auditors, so the A.O. made an addition - But fact remains that assessee has filed the revised return - Interest if any earned on the loan, the same will go to the State and it is the duty of the assessee to return it to the State as per G.O. issued in 1976 as well as terms and conditions of the loan – Decided against the Revenue.
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