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2023 (2) TMI 1267 - AT - Income TaxAdditions on account of Capital Grants & Subsidies and Consumers' Contribution - appellant should transfer 15% of the total Grants/subsidies/consumer contribution received during the year as against 10% offered by the appellant - HELD THAT:- Co-ordinate Bench decision on identical ground in assessee’s own case [2022 (7) TMI 1498 - 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. 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 - This ground of appeal preferred by the assessee is allowed for statistical purposes. Correct head of income - Treating interest income on advances paid to staff as “income from other sources” instead of “business income” - HELD THAT:- We have heard the rival submissions and perused the relevant material and the judgment of the Odisha High Court in the case of Odisha Power Generation Corporation Ltd. [2022 (3) TMI 539 - ORISSA HIGH COURT]. In view of the same, we find it proper to direct the A.O. to consider the issue afresh upon examining the same in regard to the heads of income after considering the facts of each cases. Treating miscellaneous receipts as “income from other sources” instead of “business income” - HELD THAT:- As decided in the case of CIT vs. New India Maritime Agencies (P.) Ltd. [2001 (6) TMI 27 - MADRAS HIGH COURT] wherein it was held that the “company had given the houses owned by it, to its Directors for their residences, it is doing so only in the course of his business. The principle is that if the owner of a property carries on business with a property owned by him, the income from that property must be assessed as only “income from business”. Since the Tribunal found that the house property had been used by the assessee as a part of the business and treated as business, the finding of the Tribunal that the income from the property could not be assessed separately as income from house property and included in the assessee’s total income, was correct.” Also in the case of Triveni Engg. & Industries Ltd., [2010 (9) TMI 26 - DELHI HIGH COURT] wherein the “loss on account of non-recovery of loan given to employees was treated as loss incidental to business activity, then the interest on such loan falls within the purview of business activity only not “income from other sources”. Thus we find it fit to remand this issue to the file of the Assessing Officer for verification of the facts with proper materials and allow the claim in accordance with law. Disallowance of prior period expenses - HELD THAT:- We find that the Co-ordinate Bench on identical issue following [2017 (5) TMI 1718 - ITAT AHMEDABAD] and [2022 (7) TMI 1498 - ITAT AHMEDABAD], on identical issue disposed of the ground by remitting the same to the file of the Ld. A.O. by adjudicating the issue afresh assessee is a Slate Government Undertaking and its accounts are subjected to review by CAG and therefore it cannot be postulated that there was any deliberateness in not furnishing relevant, details before the revenue authorities. The bonafides of the Assessee is also augmented by the facts that the Assessee has reported staggering carry forward losses in its returned income. Thus, there is no immediate tax advantage accrued to the assessee by the claim of impugned prior period expenses per se. We therefore deem it expedient to restore the issue back to the file of AO for examining the issue de novo after verifying facts as may be considered necessary and expedient in accordance with law. The AO shall bear in mind the ratio laid down by the Hon'ble Gujarat High Court in the case of Adani Enterprises Ltd. [2016 (7) TMI 1564 - GUJARAT HIGH COURT] while adjudicating the issue. Addition of losses due to flood, cyclone, fire etc., under the head extraordinary items - sole ground for rejecting the claim in question to lack of evidence - HELD THAT:- This issue is covered in favour of the assessee in assessee’s own case [2022 (7) TMI 1498 - ITAT AHMEDABAD] as held that lower appellate order mentions very clearly that the assessee had duly filed a letter comprising of all necessary details; division-wise on expenses towards flood related damages. The Revenue does not produce on record copy of the above stated letter so as to dispel the above said specific findings. The CIT(A) further relies on an identical order dealing with the very claim. The same has also gone unrebutted in course of hearing before us. We decide this ground as well against the Revenue. Addition of prior period expenditure - assessee submitted that this addition was deleted by the Ld. CIT(A), as the A.O. has made double addition on the same amount while computing the assessed income - HELD THAT:- D.R. could not controvert to the above submissions of the assessee. Therefore the additions made by the Ld. CIT(A) does not require any interference, hence this Ground is dismissed. Adjustment to book profit u/s. 115JB as prior period expenses and Capital Grants - HELD THAT:- A.R. appearing for the assessee has no objection in setting aside the matter back to the file of the Assessing Officer for fresh adjudication. Thus we set aside this issue to the file of the Ld. Assessing Officer and pass orders in accordance with law by giving proper opportunity to the assessee.
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