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2017 (12) TMI 1220 - AT - Income TaxInterest on purchase tax - Outstanding amount - AO held that the interest on purchase tax is covered by the provisions of section 43B of IT Act and allowable on actual payment basis - Held that:- The interest liability on unpaid purchase tax would fall within the purview of any sum payable by way of tax, duty fee or cess, etc. and the same cannot be treated as interest within the meaning of section 2(28A) of IT Act. The assessee has not paid the interest on monies borrowed for the purpose of business. The purpose of introducing the Section 43B to allow the deduction on actual payment is to ensure the compliance. In the instant case the assessee failed to make the payment of purchase tax and paid the interest thereon which takes the character of tax but not the interest. Therefore, the interest payable on purchase tax is hit by section 43B of I.T.Act and required to be allowed on actual payment basis. - Decided against assessee Depreciation on co-generation plant - AO disallowed the depreciation claimed by the assessee @80% and reworked the depreciation at 15% except in the case of 12.35 KVA turbine as per the details given - Held that:- The assessee is entitled for a higher rate of depreciation in the case of RCC Chimney, Bagasee Drier, DC Drier, Steam piping, Coal and gas feeding system and coal handling systems. In the case of sub station tower line, the expenditure required to be treated as revenue expenditure. Accordingly we direct the AO to allow higher rate of depreciation on the items mentioned above and in the case of substation tower line to allow the same as revenue expenditure. The appeal of the assessee in Ground Nos. 3 and 4 are allowed.
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