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2018 (11) TMI 1774 - AT - Income TaxBenefit of deduction u/s 80IC admissible on profits enhanced by disallowance made u/s 32 - HELD THAT:- Claim of depreciation made by the assessee company is allowable deduction and as such, the benefit of deduction u/s 80IC is allowable on profits enhanced by the disallowance made u/s 32 of the Act and in these circumstances, the claim of depreciation is revenue neutral. So far as question of treating the refund of excise duty as part of the cost is concerned, it is the case of the assessee that the entire cost has been paid by the assessee for plant & machinery and as such, it cannot be reduced from the cost of asset. Ld. AR for the assessee relied upon order passed by CIT (A) in assessee’s own case for AYs 2012-13 & 2013-14 where in excise duty refund has not been treated in the form of capital subsidy or grant which can be reduced from the cost of assets. Since findings returned by the ld. CIT (A) are based upon the decision rendered by Hon’ble Apex Court in CIT vs. Meghalaya Steels Ltd. [2016 (3) TMI 375 - SUPREME COURT] we are of the considered view that the excise refund is in the nature of revenue receipt forming part of profits and gains arising from the business and as such cannot be reduced from the cost of plant & machinery. So, the findings returned by ld. CIT (A) on this issue are confirmed. We are of the considered view that AO as well as CIT (A) have erred in making addition by disallowing the claim of depreciation of the asset made u/s 32 which would further entitle to the assessee the benefit of deduction u/s 80IC on profits enhanced by such disallowances made u/s 32 of the Act. - Decided in assessee’s favour.
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