9911796707
|
Home
Issues:
1. Whether subsidy received by the assessee should reduce the cost of the asset for depreciation purposes. 2. Whether the assessee was entitled to weighted deduction on a premium paid to the Export Credit Guarantee Corporation. 3. Whether the levy by the Coir Board, refunded to the assessee in a subsequent assessment year, qualifies for weighted deduction under section 35B of the Income-tax Act, 1961. Analysis: Issue 1: The court addressed whether a subsidy received by the assessee should reduce the cost of the asset for depreciation. The court referred to previous decisions against the Department and in favor of the assessee. It was held that the sum received as a subsidy should not reduce the cost of the asset for depreciation purposes, ruling in favor of the assessee. Issue 2: Regarding the entitlement to weighted deduction on a premium paid to the Export Credit Guarantee Corporation, the court examined the arguments presented. The Appellate Assistant Commissioner allowed the deduction, considering the levy by the Coir Board for promotional activities. The Tribunal, however, rejected the assessee's claim for weighted deduction. The court upheld the Tribunal's decision, denying the weighted deduction under section 35B, ruling in favor of the Revenue. Issue 3: The main issue was whether the levy refunded by the Coir Board in a subsequent assessment year qualified for weighted deduction under section 35B. The court analyzed the concept of expenditure as per legal precedents. It was determined that since the amount levied was returnable and not irretrievably spent by the assessee, it did not qualify as an expenditure for weighted deduction. The court concluded that the amount refunded in the subsequent year should not be brought to tax under section 41 of the Act. Therefore, the court ruled in favor of the Revenue, denying the weighted deduction on the refunded levy. In conclusion, the court's judgment addressed the three issues raised in the income-tax references, providing detailed analysis based on legal principles and precedents. The court ruled in favor of the assessee on the first two issues but sided with the Revenue on the third issue, denying the weighted deduction on the refunded levy by the Coir Board.
|
