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2012 (11) TMI 161 - AT - Income TaxDepreciation on machines purchased under TUF scheme of the Govt - Disallowance on account of higher depreciation claimed - @50% v/s 25% - Held that:- As decided in assessee's own case for A.Y. 2005-06 relying on Agarwal Rayons Pvt. Ltd. vs. ITO (2010 (7) TMI 808 - ITAT, AHMEDABAD) that in respect of same machinery claim of depreciation at 50% has to be granted - in favour of assessee. Low oil gain - addition to income - Held that:- There is no constant percentage of oil gain which can be said to be uniformly obtained by the manufacturers of texturised yarn. The comparable cases have a variation and in some cases it was noted that on account of better overall performance and profits and due to the maintenance of authentic books of account, no further addition was called for. However, in this case, keeping the various percentages of oil gain in this line of business in the various comparable cases an adhoc addition of Rs.2 lacs as against Rs.4,23,037/- done by AO shall serve the purpose to cover up any leakage as also the gap between the two percentage of oil gain noted by the AO - partly in favour of assessee. Disallowance of credit balance of NCCD (CENVAT) being written off - Held that:- The assessee had maintained exclusive system of accounting, therefore the duty paid was not debited as a part of the purchases but a separate account was maintained and carried to the balance-sheet. The AED and NCCD were applicable on POY, i.e. raw material. When the finished goods, i.e. texturised yarn is manufactured, the excise is levied in the form of basic duty. The assessee has adopted exclusive method of accounting, therefore debited the net purchases and those were separately recorded in the books of accounts. Thus finding force in assessee's argument because while maintaining the exclusive method of accounting the assessee had a choice to increase the value of the purchases in respect of the duty paid in the form of AED & NCCD, the amount which is now written off being part of the business expenditure, hence allowable under the provisions of the Act - in favour of assessee.
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