TMI Blog2012 (8) TMI 401X X X X Extracts X X X X X X X X Extracts X X X X ..... tlement of depreciation of the building constructed with the aid of the grant in view of the provisions of Section 43(1) - Held that:- It is clarified that it would be dealt with in the appropriate manner at the relevant stage. Maintenance receipts credited to Maintenance Fund - addition - Held that:- There is no trust under which the assessee can be said to hold the receipts. The assessee is collecting the maintenance charges for maintaining the properties of the housing scheme, and obviously for defraying the expenses. The receipts are its own and merely because some expenditure is required to be incurred on maintenance, the funds collected do not become funds kept or held in trust. Addition confirmed - Decided in favor of Revenue. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... um of Rs.4.1 crores ought to have been assessed as income and that the Assessing Officer s order was justified in the circumstances. It was submitted that the same could not have been reflected in the balance sheet but should have been shown as income in the profit loss account. It was urged that in any case the assessee will not be entitled to claim depreciation of the building constructed with the aid of the grant in view of the provisions of Section 43(1) of the Act which defines actual cost . As far as the maintenance amount (Rs.1,23,00,000/- and Rs.60,000/-) is concerned, it was submitted that the assessee used to collect 2% of the consideration payable for the respective units as maintenance charges and keep them in a separate fund ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... here was no outstanding balance at the end of the year. 13. From the above, it is amply clear that the amount in this regard is a capital grant. Accordingly, we do not find any infirmity in the order of the Ld. Commissioner of Income Tax (Appeals) on this issue and decide the issue in favour of the assessee. This Court sees no infirmity in the reasoning. The assessee is not claiming depreciation at this stage. The character of the amount is a grant in order to carry out the policies of the Government in the manner it is sought to be utilized by the assessee i.e. for setting up ASSAYING - Hallmarking Centre and Gems and Jewellery Training Institute . As regards the question of depreciation it is clarified that it would be dealt with in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not become funds kept or held in trust. The assessee s books would of course reflect the actual expenditure incurred which would naturally be permitted to be claimed as expenses. We also notice that the assessee had agreed as follows by its letter dated 29.10.2009: The observation pertains to low cost having scheme. The ground rent is not a part of the Income of the Corporation. However the maintenance charges received will be shown as income of the Corporation during the current financial year. 5. For the above discussion, the appeal has to succeed in part. The substantial question of law framed is answered in favour of the revenue; the sum of Rs.1,23,84,000/- and further amount of Rs.60,000/- directed to be deleted by the Appellate Co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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