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2016 (12) TMI 1075 - AT - Income TaxRevision u/s 263 - claim of additional depreciation on the ground that the assessee company is industrial undertaking engaged in the business of generation of power and activity of power generation satisfying the condition of manufacture - Held that:- Since the Assessing Officer has not considered the amendment brought to the definition of manufacture and have allowed the claim of additional depreciation on the basis of earlier decisions mentioned hereinabove, in our considered opinion, there is an error in law in the assessment order and, therefore, we do not find any reason to interfere with the findings of the ld. Principal CIT to this extent. Set off of brought forward losses - Held that:- A perusal of the order of the authorities below shows that the assessee company has claimed set off of unabsorbed business loss/unabsorbed depreciation as per the return of income field by the assessee company. The set off of loss and depreciation are to be allowed on the basis of income/loss determined in the assessment of a particular year and if subsequently the income/loss so determined is reduced in appeal the claim of set off shall be subject to change accordingly. Therefore, this issue needs verification by the A.O. while giving effect to the orders of the appellate authorities. We, therefore, do not find any error or infirmity in the direction of the ld. Principal CIT. The order to the same effect is upheld to this extent. Treatment of Government Grant u/s. 115JB - Held that:- We find that the ld. Principal CIT has ignored the fact that the grant in question was received in terms of the Financial Restructuring Plan from the Government and the company has accounted Government Grants in terms of the mandatory Accounting Standard (AS)-12 on “Accounting for Government Grants” prescribed by the ICAI. Considering the accounting treatment in the light of the Accounting Standard-12, we do not find any error on facts or in law. Therefore, to this extent the findings of the ld. Principal CIT are reversed. Provision for Collapsed Cooling Tower u/s. 115JB - Held that:- The lower of Net Booked Value and Net Realizable Value have to be considered and expected loss is to be recognized in the Profit and Loss account. The assessee has worth 50% of the WDV on estimated basis. Therefore, it cannot be said that it has Net Realizable Value to worth 50% of the WDV. Thus, the accounts of the assessee has not been in accordance with Accounting Standarad-10 and, therefore, the same violates the provisions of Section 115JB of the Act. The ratio laid down by the Hon’ble Supreme Court in the case of Apollo Tyres [1965 (12) TMI 22 - SUPREME Court ] do not apply.In our considered opinion, the Assessing Officer has not properly verified the facts and, therefore, we do not find any error or infirmity in the directions of the ld. Principal CIT so far as this issue is concerned.
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