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2019 (8) TMI 1784 - AT - Income TaxDisallowance of depreciation u/s 32(1) r.w.s.43(l) - assets of the assessee company have been acquired by it in a scheme of demerger - As per AO assets of erstwhile entity were acquired out of the amount of the excise duty exemption, which was accounted as deferred government grants in the books of accounts and therefore in accordance with the provision of Explanation-10 to section 43(1) actual cost of such assets of the demerged company should be nil as the entire cost of the assets had been met out by the Central Government - HELD THAT:- As relying on own case M/S AVICHAL BUILDCON (P) LTD. AND (VICE-VERSA) [2019 (2) TMI 47 - ITAT DELHI] Excise duty refund, is not in the form of capital subsidy or grant, which can be reduced from the cost of assets. Therefore, we agree with the argument of the appellant and in facts and circumstances as discussed above, with due respect, we differ from the findings of Ld.CIT(A) in the earlier Assessment years on the same issue and also, in view of the ratio laid down by Hon'ble Supreme Court, in MEGHALAYA STEELS LTD [2016 (3) TMI 375 - SUPREME COURT] - Accordingly, findings of the A.O. are erroneous and therefore, disallowance is deleted. Thus we restore the issue in dispute to the file of the Assessing Officer to decide in accordance with the direction of the Tribunal - The grounds of the appeal of the Revenue are accordingly allowed for statistical purposes.
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