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2015 (3) TMI 265 - AT - Income TaxDisallowance made under section 40(a)(ia) - entire amount has actually been paid during the previous year itself - CIT(A) upheld the order of the Assessing Officer in making the disallowance - Held that:- We are in conformity with the order of the CIT(A) in disallowing the advertisement expenses for non-deduction of tax at source under the provisions of section 194C of the Act. Consequently, expenditure is not allowable in the hands of the assessee for the instant assessment year in view of the provisions of section 40(a)(ia) of the Act. - Decided against assessee. Addition to Process, Project and Research Fund - assessee was unable to explain the source of addition to the said fund and consequently a sum of ₹ 40,71,516/- was treated as income of the assessee society - Held that:- he money held by the assessee under the Process, Project and Research Fund was with a specific obligation to purchase milk testing machines and milking machines for its primary cooperative societies who in turn were contributing to the cost of the purchase of the said machines. The amount collected by the assessee do not constitute the income of the assessee as the said collection has been made for the specific purpose of purchasing the milk testing machines and milking machines at village centre level. Accordingly, we hold that the amount reflected in the Process, Project and Research Fund is not the income of the assessee and there is no merit in holding the same as income of the assessee. Accordingly, we direct the AO to delete the addition of ₹ 40,71,516/-. - Decided in favour of assessee. Treatment of the subsidy received from the Central Government - whether the said amount is a capital receipt in the hands of the assessee? - Held that:- In the facts of present case, the subsidy received by the assessee is capital subsidy. In the totality of the above said facts and circumstances, we direct the Assessing Officer to allow the depreciation on the bulk coolers purchased by the assessee without reducing the amount of subsidy from the cost of the asset for computing the depreciation under section 32(1) of the Act - Decided in favour of assessee. Deduction under section 80P(2)(d) - Gross amount of interest received v/s net amount of income received - Held that:- As relying on CIT Vs. Daoba Cooperative Sugar Mills Ltd. [1997 (4) TMI 49 - PUNJAB AND HARYANA High Court] direct the Assessing Officer to allow the deduction under section 80P(2)(d) of the Act on the gross amount of interest income. - Decided in favour of assessee.
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