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2016 (4) TMI 379 - AT - Income TaxAddition made on account of initial connection charges Held that:- CIT(A) after having considered the submissions of the assessee, has given a finding that ₹ 4.76 crores was initial connection charges collected on behalf of the BPCL for the equipments and was rightly shown as current liability by the assessee and could not be treated as income of the assessee and with respect to the balance amount of ₹ 52,50,830/- he has given a finding that since the amount was received towards the installation of pipelines, meters and equipments which are assets of the assessee, the said amount was a capital receipt as it was for bringing in plant and machinery and assessee has claimed depreciation after reducing the aforesaid amount from the aggregate cost of assets. Before us, Revenue has not placed any material on record to controvert the finding of ld. CIT(A) - Decided against revenue Estimation of value of closing stock of natural gas - Held that:- We find that ld. CIT(A) while deleting the addition has given a finding that assessee purchased gas from GSPC which is transmitted through pipelines and that gas is purchased by it at the “delivery point” or “tap off” point and it is same as the point at which it is sold to the customers and it is a back to back arrangement for purchase by the assessee and sale to its customers and the quantity purchased by assessee is same that is sold by assessee. Before us, Revenue has not placed any material on record to controvert the above findings of ld. CIT(A)- Decided against revenue Addition on account of depreciation on meters and instruments - Held that:- CIT(A) while deleting the addition has given a finding that assessee is the owner of meters and instruments that has been shown as plant and machinery in the book of accounts and that assessee has claimed depreciation after reducing the amount of initial connection charges which has been collected from customers. He, therefore, held that assessee was eligible for depreciation. Before us, Revenue has not placed any material on record to controvert the above findings of ld. CIT(A). In view of the aforesaid facts, we find no reason to interfere with the order of ld. CIT(A) - Decided against revenue Non treating the process of compression of natural gas as manufacture - whether the activity of compression of Gas to CNG amounts to manufacture for claiming additional depreciation u/s.32(iia)? - Held that:- In case of GSPC Gas Company Ltd.(2014 (4) TMI 740 - ITAT AHMEDABAD) on identical facts has decided the issue in favour of assessee to held that the authorities below were not justified in rejecting the claim of the assessee for additional depreciation. - Decided against revenue Addition of liquidated damages - revenue receipt or capital receipt - Held that:- The facts of the present case are identical to that of GSPC Gas (supra). We, therefore, following the decision of Coordinate Bench in the case of GSPC (supra) direct that the addition made therein on account of liquidated damages received by the assessee from the suppliers of the equipments be deleted. Since, the addition itself is deleted, the question of granting depreciation on the amount as directed by ld. CIT(A) does not arise. We, therefore, direct the A.O. to delete the addition of liquidated damages and reverse the depreciation (as directed by ld. CIT(A)) if allowed to the assessee.- Decided against revenue
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