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2012 (2) TMI 120 - HC - Income TaxDeduction of lease equalization charges from lease rental income - lease equalization charges is a method of re-calibrating the depreciation – debits and credits of same to P&L A/c square off each other over the full term of lease period – Revenue contending for dis-allowance of same on ground that there is no provision for it under the I.T. Act - whether in determination of the real income of the assessee recourse can be taken by the assessee to the Guidance Note issued by ICAI - Held that:- As long as the method employed for accounting of income meets with the rudimentary principles of accountancy, one of which, includes offering only revenue income for tax, we cannot find fault with the assessee debiting lease equalization charges in the AYs in issue, in its P&L A/c. This represents true and fair view of the accounts; a statutory requirement u/s 211(2) of the Companies Act. As explained by us, the rationale is that over the entirety of the lease period the said debit would work itself out – Decided in favor of the assessee.
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