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TMI Blog2018 (11) TMI 1774X X X X Extracts X X X X X X X X Extracts X X X X ..... uced from the cost of asset. Ld. AR for the assessee relied upon order passed by CIT (A) in assessee s own case for AYs 2012-13 2013-14 where in excise duty refund has not been treated in the form of capital subsidy or grant which can be reduced from the cost of assets. Since findings returned by the ld. CIT (A) are based upon the decision rendered by Hon ble Apex Court in CIT vs. Meghalaya Steels Ltd. [ 2016 (3) TMI 375 - SUPREME COURT] we are of the considered view that the excise refund is in the nature of revenue receipt forming part of profits and gains arising from the business and as such cannot be reduced from the cost of plant machinery. So, the findings returned by ld. CIT (A) on this issue are confirmed. We are of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e same is not sustainable on various legal and factual grounds. 3. That the appellant craves the leave to add, modify, amend or delete any of the grounds of appeal at the time of hearing and all the above grounds are without prejudice to each other. 3. The assessee also moved an application for admission of the additional grounds which read as under: (i) That even otherwise, on facts and circumstances of the case, the appellant is entitled to claim benefit of statutory deduction u/s 80IC on additional income arising from disallowance of claim of depreciation. (ii) That in view of CBDT Circular No. 37/2016 dated 02.11.2016, the benefit of deduction u/s 80IC is admissible on profits enhanced by the disallowance made u/s 32 an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Tribunal has the discretion to allow or not to allow a new ground to be raised. But where the Tribunal is only required to consider the question of law arising from facts which are on record in the assessment proceedings, there is no reason why such a question should not be allowed to be raised when it is necessary to consider that question in order to correctly assess the tax liability of an assessee. So, respectfully following the ratio laid down by the Hon ble Supreme Court in the aforesaid referred to case, the legal grounds raised by the assessee are admitted. 7. During the course of hearing, the ld. Counsel for the assessee at the very outset stated that the issue under consideration is squarely covered in assessee s favo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll be the same which was to be demerged company and thereby recomputed the claim of deprecation u/s 32 (1) of the Act by reducing the actual cost of asset by ₹ 78,32,12,592/-. 8. Ld. AR for the assessee by relying upon CBDT Circular No.37/2016 dated 02.11.2016 contended that benefit of deduction u/s 80IC is admissible on profits enhanced by disallowance made u/s 32 of the Act which makes the claim of depreciation as revenue neutral and further contended that the assessee is entitled to claim benefit of statutory deductions u/s 80IC on additional income arising from disallowance of claim of depreciation. 9. On the other hand, Id. DR also by relying upon Explanation 7 10 to section 43 (1) contended that the actual cost of re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rofit-linked deduction under Chapter VI-A. ..... 3. In view of the above, the Board has accepted the settled position that the disallowances made under sections 32, 40(a)(ia),40A(3), 43B, etc. of the Act and other specific disallowances, related to the business activity against which the Chapter VI-A deduction has been claimed, result in enhancement of the profits of the eligible business, and that deduction under Chapter VI-A is admissible on the profits so enhanced by the disallowance. 4. Accordingly, henceforth, appeals may not be filed on this ground by officers of the Department and appeals already filed in Courts/Tribunals may be withdrawn / not pressed upon. The above may be brought to the notice of all concerned. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of revenue receipt forming part of profits and gains arising from the business and as such cannot be reduced from the cost of plant machinery. So, the findings returned by ld. CIT (A) on this issue are confirmed. 14. In view of what has been discussed above, we are of the considered view that AO as well as CIT (A) have erred in making addition of ₹ 6,40,38,391/- by disallowing the claim of depreciation of the asset made u/s 32 of the Act which would further entitle to the assessee the benefit of deduction u/s 80IC on profits enhanced by such disallowances made u/s 32 of the Act. Consequently, appeal filed by the assessee is partly allowed. So, respectfully following the aforesaid referred to order dated 17.09.2018 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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