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2015 (10) TMI 1448 - AT - Income TaxReduced depreciation on reduced cost of fixed assets - whether grant received by assessee from State Govt. towards cost of capital had to be considered in the manner provided in section 43(1) of the Act, that the AO was justified in reducing the grant in question? - Held that:- We find that the AO had not invoked the provisions of section 43(l) Expl.(10) while completing the assessment, although he had held that government grants on capital assets would affect depreciation allowable to the assessee and that the revenue grants and subsidies were taxable. Thus, it is clear that the issue of actual cost as per the provisions of section 43(1) of the Act was not deliberated upon or decided by the AO. It was the FAA who held that the AO should have invoked the provisions of section 43(l)Expl.(10). In our opinion the AO had no chance to examine the letter dated 03.03.2009 of the Assam Govt. and take a decision about the issue-especially the contribution by the Govt. as promotor's quota. In our opinion the matter need further verification and investigation. Therefore, in the interest of justice we are remitting back the issue to the file of the AO for fresh adjudication. He is directed to decide the assessee issue afresh after considering the material to be produced by the assessee and the judgment of Bharat Sanchar Nigam Ltd. v. Dy. CIT [2013 (5) TMI 416 - DELHI HIGH COURT]. - Decided in favour of the assessee for statistical purposes.
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