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2016 (11) TMI 527 - AT - Income TaxExemption u/s 11 - Application of income towards loan repayment to the bank - depreciation claim - whether the loan money was shown to have been utilized for acquisition of the asset? - Held that:- On perusal of the statement of income filed for the assessment years 1992-93 to 1999-2000 during which the loan was received by the assessee, we find that apparently the loan under reference received from World Bank has not been shown as income in any of the year concerned. Further, we find from the statement of total income that the cost of fixed assets acquired during the relevant years has been claimed as application of income. In the note appended to depreciation chart for the assessment year 1992-93 enclosed along with the balance sheet and profit and loss account, it is mentioned that additions include assets amounting to ₹ 91,31,124/- (previous year ₹ 75,50,597/-) purchased under the Industrial Credit and Investment Corporation of India Ltd. (Technology Service Revolving Fund) Scheme. Similar notes have been provided in case of other assessment years involved. In the assessment years from 1992-93 to assessment year 1998-99, the depreciation provided in the books of accounts has been reduced from the expenditure claimed towards application of income, which means the depreciation has not been claimed as application of income. From the assessment year 1999-2000 onwards till the assessment year under consideration also the depreciation has not been claimed towards application of the income. In view of above observations, it is clear that the assessee has not shown the loans received as its income or receipt, in the year in which such loan was received by the assessee and, therefore, the repayment also cannot be allowed as an expenditure or application of income. Further, we find that loan money obtained has been shown as application on acquisition of fixed assets and, therefore, the assessee has already claimed loan as deduction or application of income and therefore, in our opinion, allowing application of repayment of loan will amount to double deduction. Thus as assessee has already been allowed cost of addition to asset acquired out of the loans as application of income in relevant years and therefore assessee cannot be allowed the repayment of loan as application of the income - Decided against assessee
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