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2022 (1) TMI 37 - AT - Income TaxDepreciation on assets for which the actual cost as per section 43(1) - Depreciation on demerger - AO has disallowed depreciation on the ground that the assessee had received assets free of cost from the Government of UP - HELD THAT:- As decided in own case [2021 (12) TMI 1267 - ITAT DEHRADUN] assets have been transferred from Uttar Pradesh Government (UPJVNL) to Uttaranchal Government (UJVNL). There is no claim of the depreciation twice by both the Governments - demerger led to division of assets in a fixed ratio and the same was duly accounted for both the entities as per the written down value (WDV) as on that date. The depreciation on de-merger cannot be a forgone benefit owing to de-merger, which is the result of state reorganization. Hence, we decline to interfere with the reasoned order of the Ld. CIT (A). - Decided against revenue. Capacity charges, deemed generation charges and capacity index incentive - As decided in assessee's own case [2021 (6) TMI 881 - ITAT DEHRADUN] assessee has produced the copy of the Hon’ble UERC order dated 27.04.2015 alongwith its revised year wise income of capacity charge, deemed generation charge and capacity index incentive duly agreed by UPCL and UJVNL. A copy of the agreed reconciliation statement between UPCL and UJVNL is also furnished alongwith the copy of bank statement in which the above amount of installment have been received by the UJVNL, in support of its claim, a written explanations have been submitted by the assessee on the issue of capacity charges, capacity index incentive and deemed generation charges is given as mentioned in the body of the order. The assessee has agreed to offer the income earned for the period from F.Y.2004-05 to F.Y.2012-13 under the head capacity charges, deemed generation charge and capacity index incentive to be taxed in F.Y.2015-16 i.e., on receipt basis and has also paid two installments of advance tax after including the capacity charges in the income of the company - we find no merit in the addition made by the AO in the present order of assessment - Decided against revenue.
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