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Pr. Commissioner of Income Tax Delhi-2, New Delhi Versus Central Warehousing Corporation

2017 (8) TMI 244 - DELHI HIGH COURT

Deductible / Exempted income u/s 10(29) - depreciation to be excluded from the income or not - CIT(A) allowed the computation after excluding depreciation as part of the expenditure and taking gross receipts from warehousing and Inland Container Depot/ Container Freight Station (‘ICD/CFS’) - Held that:- As evident form the supreme court case in Nectar Beverages Pvt. Ltd. [2009 (7) TMI 5 - SUPREME COURT] while explaining the rationale behind insertion of Section 41(2) of the Act, delved into the .....

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any legal error in concluding that for the purposes of Section 10(29) of the Act ‘depreciation’ is not an expense but allowance. No substantial question of law - ITA 584/2017, ITA 585/2017, ITA 587/2017, ITA 588/2017 AND ITA 589/2017 - Dated:- 1-8-2017 - MR. S. MURALIDHAR AND MS. PRATHIBA M. SINGH, JJ. For The Appellant : Mr. P. Roychaudhuri, Sr. Standing Counsel For The Respondent : Mr. Mayank Nagi, Advocate with Mr. Tarun Singh, Advocate ORDER Dr. S. Muralidhar, J.: 1. These five appeals have .....

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le income under Section 10 (29) of the Act is to be computed after excluding depreciation as part of the expenditure and taking gross receipts from warehousing and Inland Container Depot/ Container Freight Station ( ICD/CFS ). 3. According to the Revenue, depreciation is like any other business expense which is debited to the profit and loss account and, which, goes to reduce the tax liability of an Assessee. Therefore, according to the Revenue, for the purpose of Section 10 (29) of the Act, dep .....

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was in the context of Section 41(1) of the Act which dealt with concept of balancing charge . He submitted that the Supreme Court in the above decision was not examining whether depreciation should be treated as an expense or as an allowance for the purpose of Section 10 (29) of the Act. 6. The Court has examined the decision in Nectar Beverages Pvt. Ltd. (supra). Para 11 of the said decision, relevant for the present case, reads as under: 11. The entire controversy, therefore, stands resolved .....

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eciation had been allowed and subsequently such plant and machinery was sold, discarded or destroyed, the assessee might get some value either as a result of sale or insurance or from salvage or compensation thereabout. The necessity to keep Section 41(2) as a provision in addition to Section 41(1) arose from the fact that, in its very nature, depreciation is neither a loss, nor an expenditure, nor a trading liability, referred to in Section 41(1). The depreciation recovered on sale of the capit .....

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) Act, 1995 the bottles and crates even below Rs. 5,000/- came within the block of assets as defined under Section 2(11) of the 1961 Act. As stated, this judgment is confined to depreciable assets costing less than Rs. 5,000/- which did not enter the block of assets during the assessment years in question (when Section 41(2) stood deleted). (emphasis in original) 7. It is evident from the above that the Supreme Court has, while explaining the rationale behind insertion of Section 41(2) of the Ac .....

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