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2020 (11) TMI 141 - HC - Income TaxGrants received from the Government of Tamil Nadu - Tribunal treating the receipt in question as interest free loans and allowing depreciation claimed against the assets acquired from the said receipts - HELD THAT:- The wordings of the Government Order clearly show that the amount, which was transferred to the assessee, was the financial assistance given by the ADB, which would obviously show that it was a loan. Since it is an interest component, it appears that the assessee addressed to the Government and the Government, in turn, accepted the same and treated it as an interest free loan from the Government. Therefore, in all probabilities, the assessee’s liability will be only to the Government and not to the ADB. The Assessing Officer was of the opinion that at best, the Government Order could be given prospective effect and doubted the bona fides of G.O.Ms.No.22 dated 03.2.2016 by observing that it is of recent origin to get over the issue regarding the claim for depreciation. We find from G.O.Ms.No.22 dated 03.2.2016 that the assessee has been addressing the Government from 30.1.2014 much prior to the assessments being taken up for consideration. Admittedly, funds were sanctioned by a bank namely the ADB and there was no record to show that the same was a grant to the assessee. In the Government Order in G.O.Ms.No.581 dated 19.10.2005, it has been clearly stated that it is a loan from the ADB. Therefore, we are convinced to hold that all along, the financial assistance rendered to the assessee was treated as a loan at the instance of the bank and subsequently, pursuant to G.O.Ms.No.22 dated 03.2.2016, the amount expended was treated as an interest free loan to the assessee. Thus, we find that the CIT(A) and the Tribunal rightly granted relief to the assessee and the Revenue has not made out a case to interfere with the common impugned order. - Decided against the Revenue.
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