Home Case Index All Cases Income Tax Income Tax + HC Income Tax - 2015 (1) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2015 (1) TMI 701 - HC - Income TaxDepreciation disallowed - interest expenditure on unpaid purchase consideration - AO invoked the Explanation - 3 of Section 43(1) - Tribunal deleted addition holding that claim of depreciation on enhanced value of assets by the assessee was not with an intention to reduce tax liability - Held that:- It can be noted from the record that at the time of transfer of the assets, the assessee had no income for it to reduce its tax liabilities by way of such transfer, and therefore, both the CIT [A] and the Tribunal had rightly concluded that the Assessing Officer was in error in invoking Explanation 3 to Section 43 for determining actual cost in the said deal. Thus no mistake in CIT [A] as well as Tribunal in concluding that Explanation 3 to Section 43 of the Act was not required to be invoked. The first issue need no consideration therefore as no substantial question of law has arisen. Decided against revenue. For the removal of doubts, it is hereby declared that where any amount is paid or is payable as interest in connection with the acquisition of asset, so much of such amount as is relatable to any period after such asset is first put to use shall not be included, and shall be deemed never to have been included, in the actual cost of such asset.The Tribunal has relied upon a decision of the Apex Court in the case of TRF Ltd. Vs. CIT reported in (2010 (2) TMI 211 - SUPREME COURT ) and observed that suitable test is required to be applied to examine as to whether the said bad debts have been actually written off as irrecoverable in the account books or not. We are in complete agreement with the reasonings adopted by the Tribunal and do not see any reason for interference. In the premises aforesaid, no substantial question of law requires adjudication afresh. Appeals stand dismissed accordingly. - Decided against revenue.
|