Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2022 (7) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2022 (7) TMI 1442 - AT - Income TaxCapital Grants & Subsidies and Consumers’ Contribution - addition of 15% of Capital Grants as against 10% offered by assessee - HELD THAT:- As decided in own case [2020 (11) TMI 301 - ITAT AHMEDABAD] as per provisions of section 43(1) of the Act, the capital grant should be reduced from the cost/WDV of the relevant asset, and thereafter the depreciation is to be calculated. Thus, the capital grant receipt in respect of asset, on which depreciation is allowable at the rate different from 15% should be worked out as per the applicable rate. The DR could not point out any mistake in the above submission of the assessee, which we find is in accordance with law. We, therefore, set aside the orders of the lower authorities on this issue, and restore the matter back to the file of the AO for adjudication afresh after verifying the proportionate amount of grant relating to different asset, and applying the actual rate of depreciation which relate to these assets. Thus, this ground of appeal of the assessee is allowed for statistical purpose. Correct head of income - Income as “other income” OR business income - interest on loans to staff and other advances - HELD THAT:- As decided in the case of Odisha Power Generation Corporation Ltd [2022 (3) TMI 539 - ORISSA HIGH COURT] no difficulty in accepting the submission of the Assessee that the interest received on advances and loans given to its employees are receipts in normal course of carrying its business and should be considered as income derived from its essential business activities. Likewise, the late payment by GRIDCO for the electricity supplied, is sought to be made up by GRIDCO by issuing bonds on which the Assessee earns interest. This also therefore, has a direct nexus with the essential business activity of the Assessee. We find it fit and proper to direct the Ld. AO to consider the issue afresh upon examining the same in regard to the head of income upon considering the relevant evidence Disallowance of prior period expenses - HELD THAT:- The Coordinate Bench in [2020 (11) TMI 301 - ITAT AHMEDABAD] has set-aside the identical issue to the file of the Ld. AO. for de novo adjudication upon giving an opportunity of being heard to the assessee and upon considering the evidence which the assessee may choose to file at the time of hearing of the matter. This ground is allowed for statistical purposes. Nature of receipt - Guarantee fees paid to the Government of Gujarat - HELD THAT:- As carefully considered the judgment passed by the Coordinate Bench in [2020 (2) TMI 1223 - ITAT AHMEDABAD] While deciding the ground in favour of the assessee by upholding the order passed by the Ld. CIT(A) in the appeal preferred by the Revenue concluded where no such asset is created, it would be indicative of an expenditure which was not capital in nature. Another test relates to the principle of "enduring benefit". "Enduring benefit" may be in the form of long lasting use of an asset or the acquisition of a right to exploit certain commercial processes, etc. In the instant case, the assessee did not acquire any right to exploit a commercial technology or process, and neither was the benefit "enduring", since the payment of guarantee commission was an annual charge. The benefit derived from payment of such commission thus lasted for exactly one year only. Such shortlived benefit cannot be categorized as "enduring". Hence, we are inclined to the view that the payment of guarantee commission was a revenue expenditure. Disallowance of claim of raising finance - HELD THAT:- No reason to interfere of the order passed by the Ld. CIT(A) in deleting the disallowance of claim of cost of raising finance as relying on [2020 (2) TMI 1223 - ITAT AHMEDABAD]. Loss due to pilferage, shortage of material in transit etc. to be allowed as relying on own case [2015 (6) TMI 1096 - ITAT AHMEDABAD]. MAT u/s 115JB - addition of Prior Period Expenses made while computing Book Profit computed u/s 115JB - HELD THAT:- As relying on M/s. Ashirwad Hgiene Pvt. Ltd [2016 (1) TMI 1501 - ITAT CHANDIGARH] no adjustment on account of prior period expenses is to be made in the net profit of the company for arriving at the book profits u/s 115JB of the Act. The appeal of the assessee is therefore allowed.
|