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2015 (3) TMI 1151 - AT - Income TaxCapital Incentive subsidy received for establishing industry in Backward area - whether is to be reduced from actual cost of asset? - Appellant prays to hold that Capital Subsidy, is not to be reduced from ‘Actual Cost’ - Disallowance of Depreciation by reducing Written down value of assets by subsidy received - Held that:- The perusal of the Package Scheme of Incentive, 1993 reflect that the scheme was formulated to give incentive for setting up the industries in certain belts of Maharashtra and for the purpose of working out the amount of subsidy, though the cost of eligible investment was taken as the base, but the said subsidy was not specifically intended to meet the cost of assets. In view thereof, it could not be held that the incentive received by the assessee under the Package Scheme of 1993 in the form of subsidy was covered under provisions of Explanation 10 to section 43(1) of the Act and consequently, the subsidy amount was not to be reduced from the cost of the assets. Accordingly, the Assessing Officer is directed not to reduce the value of the subsidy from the cost of assets while allowing depreciation on the said assets of the assessee. - Decided in favour of assessee
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