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2019 (9) TMI 1062 - AT - Income TaxWaiver of loan - Addition u/s 41 or 28 - HELD THAT:- Funds from the cash credit facility were diverted to purchase capital asset. We note the chart given by the assessee shows utilization of fund for acquisition of capital assets vis-a-vis source of fund for the last 6 years prepared on the basis of the Audited Annual Accounts. It is evident from the chart that the cash credit and term loan was utilized for the purpose of acquiring capital assets. Even if the borrowing was in the nature of cash credit, it was not utilized for working capital. Therefore it is clear from the chart that no part of it is falling within the domain of current asset. Thus, it cannot be said that the loan was not utilized for the purpose of capital asset. We note that these receipts i.e. cash credit facility and term loan were utilized for capital assets and these receipts being capital receipts are not taxable, for that we rely on the judgment of the Hon'ble Supreme Court of India in the case of Commissioner vs. Mahindra & Mahindra Ltd. [2018 (5) TMI 358 - SUPREME COURT] Depreciation for the fixed assets acquired in view of observation that assets was not acquired before 31.03.2010 - HELD THAT:- As assessee submitted copies of the invoices towards purchase of fixed assets and contended that the machineries were received well before 31/03/2010. It is further submitted that the machineries were duly installed within 31/03/2010 as the same was in knock down condition. TheldCounsel further submitted that the A.O. misunderstood the facts that RC date mentioned on the face of the invoice as date of receipt. In fact the RC date is the date of receipt of invoice at Head office. It is evident from the details of addition to fixed assets that the concern machineries were received within 31st March, 2010. After considering and going through the submission along with supporting documents furnished, we are inclined to agree with the order of ld CIT(A). That being so, we decline to interfere with the order of Id. C.I T.(A) in deleting the aforesaid addition. His order on this addition is therefore, upheld and the grounds of appeal of the Revenue are dismissed. Addition towards interest subsidy received - HELD THAT:- As submitted that the annual accounts of the company are prepared as per accounting standards and accounting policies as prescribed by the Companies Act. The company follows mercantile system of accounting. A.O. without going to the facts of the case added interest subsidy received during the year to the total income of the assessee. It is clear from the note no. 5 of the schedule 17 (Note on Accounts) of the Annual Accounts for the previous year 2009-10, that the assessee company had shown ₹ 345.36 lacs as recoverable on the basis of claim lodged with appropriate authorities in the earlier year and ₹ 293.69 lacs had been shown as recoverable for the previous year ended 31st march, 2010 after adjusting ₹ 51.67 lacs received during the year. As such the subsidy received during the year has already taxed in earlier years. Hence the same cannot be taxed twice.We note that ld CIT(A) has rightly deleted the addition on this account.
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