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2016 (7) TMI 608 - AT - Income TaxCapital investment subsidy ,Interest subsidy and Electricity subsidy received from Govt. of West Bengal under Incentive Scheme 2000 - Whether such receipt could be brought to tax as a capital or revenue receipt with corresponding impact on the allowance of depreciation? - Held that:- Keeping in view the objects of the West Bengal Incentive Scheme 2000 we hold that the capital subsidy is to be treated as capital receipt. Consequentially the assessee need not reduce the same from the cost of the asset for the purpose of claiming depreciation. We hold accordingly. Similarly, we hold that the interest subsidy and Electricity subsidy should also be treated as capital receipt. We direct the Learned AO to grant the additional depreciation on the actual cost of asset before reducing subsidy in terms of section 32(1)(iia) of the Act.
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