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2023 (10) TMI 446 - AT - Income TaxHigher rate of depreciation on moulds - moulds used by the vendors and not by the assessee directly - manufacturing of rubber and plastic goods done by the vendors - Revenue’s contention was that since the assessee is a two-wheeler manufacturer, the depreciation @ 30% is not available to the assessee as the assessee is not a rubber/plastic manufacturer - HELD THAT:- As decided in Honda Motorcycle & Scooter India (P.) Ltd. [2016 (10) TMI 634 - ITAT DELHI] it is immaterial whether the plastic /rubber moulds were used in the factory premises of the assessee or vendors. Prime requirement is that moulds should be owned by the assessee, the same should be part of block assets shown by the assessee and these were put to use for the purpose of business of the assessee and the three requisite conditions have been fulfilled by the assessee in the present case and thus it is entitled to claim depreciation @ 30% which was rightly allowed by the ld. CIT(A). Decided in favour of assessee. Addition of excise duty not recovered from sales - According to Ld. AO the assessee has got benefit of CENVAT on one hand and has shown reduced income by excluding excise duty not recovered from sales, therefore, expenses claimed in the profit and loss account on account of excise duty not recovered from the sales is not allowable - HELD THAT:- We note that Ld. AO got confused between the two items; CENVAT/MODVAT and excise duty which are two different items and cannot be co-related. We are fully concurred with the finding of Ld. CIT(A) that one is expense while the other is a credit or prepaid tax which can be adjusted by offsetting the same with the excise duty payable and Ld. AO has failed to notice the difference between the two. Accordingly, we uphold the order of Ld. CIT(A) by holding that excise duty not recovered from sales as debited to the profit and loss account is a deductible item u/s 37 of the Act. Accordingly, the appeal of the Revenue is dismissed by upholding the order of Ld. CIT(A).
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