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2013 (9) TMI 398 - AT - Income TaxAllowance of Depreciation u/s 32(1) of the Income Tax Act for the assets acquired in the prior period – Retrospective amendment in section 43(6) of the Income Tax Act - Assessee filed return of income on 28.11.2003 disclosing total loss of Rs.146,78,95,230/-. The assessment was framed u/s. 143(3) of the Act as the assessee has claimed depreciation of Rs.201,21,64,960/- on fixed assets comprising depreciation of Rs.194,77,57,108/- on old assets and Rs.6,44,07,852/- on assets acquired during the year under consideration. The AO while completing assessment u/s. 143(3) of the Act allowed depreciation to the extent of Rs.6,44,07,852/- in respect of those assets which were acquired during the year under consideration. But did not allow depreciation of Rs.194,77,57,108/- in respect of old assets on the ground that the required information regarding details of actual assets of written down value as on 01.04.2002 was not furnished before him – Held that:- The assessee has filed step wise working in the form of audit report dated 20.01.2010 given by a Chartered Accountant firm - Subsequent amendment carried out by the Finance Act, 2008 by inserting explanation (6) to section 43(6) of the Act with retrospective effect from 01.04.2003 - For calculating depreciation the AO has to consider the retrospective amendment carried out in the statute book by inserting explanation (6) to section 43(6) of the Act and to allow depreciation in accordance with law after making fresh calculation with reference to the book value of the assets following the retrospective amendment – Decided in favor of Assessee. Whether subsidy on account of river dredging and maintenance should be taxed in the hands of the assessee on cash basis as is being consistently followed by assessee or on accrual basis as alleged by AO – Held that:- The assessee offered for taxation the amount actually paid by government year after year against the dredging subsidy in the relevant year in which such payment was actually received and the amount sanctioned by way of dredging subsidy, which was offered for taxation in the year in which such sanction was granted on receipt of audit verification from CAG - Once the assessee is consistently following a system of accounting that actually received amount is offered for taxation year after year and it is accepted in some of assessment years, revenue cannot take a different stand in other years – Decided in favor of Assessee. Deduction u/s 80G of the Income Tax, for the donation made - Assessee Port Trust has made deduction of Rs. 4 crores to the Prime Minister’s National Relief Fund - The assessee explained that during the FY 2004-05 relevant to AY 2005-06 the said donation was inadvertently debited to suspense account and was not transferred to P&L Account drawn for 31st March, 2005. Ld. counsel for the assessee stated that this mistake was detected in FY ending 31.03.2009 relevant to AY 2009-10 and immediately donation of Rs.4 crores was transferred to P&L Account under the head prior period charge – Held that:- This is an allowable claim in the year in which the payment is made. However, these are subject to verification of AO – Subject to verification by A.O. will decide in which year it is allowable.
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