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2017 (6) TMI 74 - AT - Income TaxDepreciation on Capital subsidy - subsidy was granted for the specific purpose of technology up-gradation - Held that:- See Sasisri Extractions Ltd. vs. CIT [2008 (1) TMI 485 - ITAT VISAKHAPATNAM ] held that a careful perusal of "Target 2000" scheme shows that the scheme was intended to accelerate industrial development of the State and the incentive was given for setting up of industries in Andhra Pradesh and for the purpose of determining the amount of subsidy to be given the cost of eligible investment was taken as the basis, though it was not specifically intended to subsidise the cost of the capital. Under the circumstances, we are of the view that the incentive in the form of subsidy cannot be considered as a payment directly or indirectly to meet any portion of the actual cost and thus it falls outside the ken of Explanation 10 to section 43(1) of the Act. In the light of the above discussion, we are of the view that for the purpose of computing depreciation allowable to the assessee, the subsidy amount cannot be reduced from the actual cost of the capital asset. - Decided against revenue Addition invoking provisions of Section 40A(3) - Held that:- See Anupam Tele Services vs. ITO [2014 (2) TMI 30 - GUJARAT HIGH COURT] as held rigors of section 40A(3) of the Act must be lifted. - if the assessee had not made cash payment and relied on cheque payments alone, it would have received the recharge vouchers delayed by 4/5 days and thereby severely affecting its business operations. - Decided against revenue
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