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2024 (5) TMI 348 - ITAT DELHIDeduction u/s 80IAB on the disallowance of depreciation on Water-use Rights (Intangibles Asset) - As per revenue payment cannot be considered to be on account of acquisition of capital asset as right to use water neither diminishes nor enhances by any means. The Government has just given a facility to the assessee to use the same and the assessee has clearly tried to claim the depreciation on the same, this cannot be allowed - HELD THAT:- As decided in assessee own case we agree with the contention of the Id, counsel that such an enhancement of profit by way of disallowance of depreciation would be eligible for deduction u/s. 80IAB and this position is now set at rest by CBDT Circular No. 37/2016 dated November 2, 2016, wherein the CBDT has accepted that if disallowance leading to enhancement in the profits of eligible business, then deduction under Chapter-VIA of the Act is admissible on the profits so enhanced by the disallowance. Accordingly, we direct the Assessing Officer to allow the deduction u/s. 80IAB on the disallowance of depreciation and gave consequential relief. In view of our aforesaid direction, the issue raised on merits on allowability of depreciation on intangible assets is purely academic - Appeal of the assessee is allowed.
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