TMI Blog2020 (11) TMI 141X X X X Extracts X X X X X X X X Extracts X X X X ..... . Therefore, in all probabilities, the assessee s liability will be only to the Government and not to the ADB. The Assessing Officer was of the opinion that at best, the Government Order could be given prospective effect and doubted the bona fides of G.O.Ms.No.22 dated 03.2.2016 by observing that it is of recent origin to get over the issue regarding the claim for depreciation. We find from G.O.Ms.No.22 dated 03.2.2016 that the assessee has been addressing the Government from 30.1.2014 much prior to the assessments being taken up for consideration. Admittedly, funds were sanctioned by a bank namely the ADB and there was no record to show that the same was a grant to the assessee. In the Government Order in G.O.Ms.No.581 dated 19.10 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0 on the following substantial questions of law : i. Whether, on the facts and in the circumstances of the case, the Tribunal was right in granting relief to the assessee by treating the receipt in question viz. grants received from the Government of Tamil Nadu as interest free loans and allowing depreciation claimed against the assets acquired from the said receipts despite the fact that the Tamil Nadu Government GO dated 18.7.2005 had classified the same as grants only? ii. Whether, on the facts and in the circumstances of the case, the Tribunal was right in decreasing the cost retrospectively based on GO 22 dated 03.2.2016 especially when Section 43(1) read with Section 43(6) of the Income Tax Act envisages the computation of a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ture of grant for execution of various projects and that it had to be excluded from the cost of the asset as per Explanation 10 to Section 43(1) of the Act. 6. For the assessment year 2015-16, the assessee filed their return of income declaring a total income of ₹ 7,49,68,680/-. Upon scrutiny, the assessment was completed by order dated 29.12.2017 with the same reasoning as assigned for the assessment year 2014-15. 7. As against the said assessment orders, the assessee preferred appeals before the Commissioner of Income Tax (Appeals)-2, Chennai [for brevity, the CIT(A)]. The appeals were allowed by two separate orders (i) dated 30.11.2017 for the assessment year 2014-15 and (ii) dated 22.11.2018 for the assessment year 2015-16. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e us by the assessee. In G.O. Ms.No.581 dated 19.10.2005, the Government sanctioned financial assistance to the tune of ₹ 56.931 Crores for rehabilitation of tsunami damaged roads and bridges, ports and harbours. In this Government Order, there was a reference to two earlier Government Orders namely (i) G.O.Ms.No.379 Revenue Department dated 27.6.2005 wherein the Government issued administrative sanction for implementation of the Tsunami Emergency Assistance Projects (TEAP) with the Asian Development Bank (ADB) assistance at a cost of ₹ 629.63 Crores; and (ii) G.O.Ms.No.418 Revenue Department dated 20.7.2005 wherein the Government constituted an Empowered Committee to clear the TEAPs. We have referred to these Government Orders ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a resolution passed by the Board of the assessee requesting the Government to treat the financial assistance as an interest free loan and the Government considered the same and issued orders that the financial assistance from the ADB for implementing various works to develop the infrastructural facility of the TEAP was treated as an interest free loan from the Government. The wordings of the Government Order clearly show that the amount, which was transferred to the assessee, was the financial assistance given by the ADB, which would obviously show that it was a loan. Since it is an interest component, it appears that the assessee addressed to the Government and the Government, in turn, accepted the same and treated it as an interest free l ..... X X X X Extracts X X X X X X X X Extracts X X X X
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