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2004 (8) TMI 38 - HC - Income TaxDepreciation on generator - Income-tax Officer revised the assessment and determined the cost of the generator by reducing it by the amount of subsidy received (from the U. P. Financial Corporation) and allowed depreciation on such reduced amount - whether the amount of subsidy received should be deducted while working out the cost of a capital asset - Where Government subsidy is intended as an incentive to encourage entrepreneurs to move to backward areas and establish industries, the specified percentage of the fixed capital cost, which is the basis for determining the subsidy, being only a measure adopted under the scheme to quantify the financial aid, is not a payment, directly or indirectly, to meet any portion of the 'actual cost' - Thus amount of subsidy is not to be deducted from the 'actual cost' under section 43(1) for the purpose of calculation of depreciation
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