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2013 (8) TMI 548 - ITAT DELHI
Capital receipt or Revenue receipt - Entertainment tax subsidy - CIT held it as capital receipt - Held that:- Ld. CIT (A) in the year before us, has deleted the disallowance by observing that similar additions for Assessment Year 2006-07 and 2007-08 were deleted by the CIT (A) by referring to, inter alia, 'Ponni Sugar' (2008 (9) TMI 14 - SUPREME COURT) and that the facts and circumstances in the years under consideration were similar to those in the earlier years. This has not been disputed - Decided against Revenue.
Applicability of Explanation 10 to sec. 43(1) - Held that:- Central Government granted subsidy to assessee as incentive for setting up industry in backward areas - subsidies granted to industries on a percentage of the capital cost are not deductible from the "actual cost" under section 43(1) of the Act for the purpose of calculation of depreciation, etc. - there was no obligation on assessee to utilize it for any specific purpose will not be hit by Explanation 10 to Sec. 43(1) - entertainment subsidy being for the promotion of cinema/ multiplex industry; only because the methodology adopted is to cap it to capital cost of assets will not mean to reduce the cost of asset directly or indirectly in terms of Explanation 10 to Sec. 43(1) - Decided in favour of assessee.