9911796707
TMI Blog1993 (3) TMI 381X X X X Extracts X X X X X X X X Extracts X X X X ..... uting income under section 41(1) of the Income-tax Act in respect of proportionate subsidy received during the period relevant to the assessment year 1982-83 against the cost of generator installed on 19-3-1980? 2. The facts briefly stated are that the assessee is a company. In this case, the ITO made rectification under section 154 of the Act as, according to him, subsidy granted to the assessee by the Government to set up a generator was to be deducted while taking actual cost under section 43(1) of the Act. As this was not done in the original assessment order, he rectified the order and allowed depreciation after deducting subsidy granted to the assessee. 3. On appeal, the Commissioner (Appeals) following the decisio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or with accessories (date of installation is 19-3-1980). The entire cost of acquisition amounting to ₹ 17,27,503.83 has been treated as revenue expenditure by Commissioner (A)-XII, in his order dated 26-11-1984. As the entire amount of expenditure has already been treated as revenue expenditure, the proportionate amount of subsidy to the cost of acquisition should be chargeable as profit under section 41(1). The mistake being apparent from records, notice under section 154 was issued on 17-4-1986. Sri B.D. Mundra, AIR appeared and stated that they did not utilise the amount of subsidy for installation of Generators. The submission of the AIR is not tenable inasmuch as the entire cost of the Generator was allowed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... round alone the order of the ITO is hereby cancelled and the appeal stands allowed. It may, however, be mentioned that interest was charged in the rectification order dated 24-11-1986 which is the subject matter of the IT Reference No. 4 of 1992. This Court by the judgment dated 8-2-1993 answered the said reference in favour of the assessee holding that no interest could be levied under section 217. 8. The Tribunal held as follows: After careful consideration I find that certain issues have been raised in the appellant case for this year as well as for the succeeding year, i.e., assessment year 1982-83, where divergent view has been advocated on the same point. The glaring example is regarding the nature of su ..... X X X X Extracts X X X X X X X X Extracts X X X X
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