The HC ruled in favor of the assessee regarding Asset ...

Asset Reconstruction Cost Qualifies as Present Obligation Under AS 29, Not Contingent Liability; Section 36(1)(iii) Interest Deduction Clarified

March 13, 2025

Case Laws Income Tax HC

The HC ruled in favor of the assessee regarding Asset Reconstruction Cost (ARC) provisioning, holding it qualified as a present obligation under AS 29 rather than a contingent liability. The Court determined the contractual obligation to repair and restore premises constituted an ascertainable liability that was properly provisioned for. The HC rejected the tax authorities' view that only ascertained liabilities could be provisioned. Regarding interest deduction under Section 36(1)(iii), the Court clarified that the provision's proviso merely disallows interest during the period between borrowing and when an asset is put to use for business extension. The matter was remanded to the AO to examine whether cell sites were actually put to use and whether funds came from a common pool.

View Source

← Previous Next →

The HC ruled in favor of the assessee regarding Asset ...

Asset Reconstruction Cost Qualifies as Present Obligation Under AS 29, Not Contingent Liability; Section 36(1)(iii) Interest Deduction Clarified

March 13, 2025

Case Laws Income Tax HC

You may also like:

Depreciation - Cost of acquisition - depreciation to be allowed on WDV of the predecessor or Revaluation of assets - Conversation of firm to a company - The assessee as...

The grant received by the assessee towards plant and machinery and technical civil works is required to be reduced from the cost of assets for computing depreciation u/s...

Depreciation - Determination of WDV - Cost of Acquisition - waiver or write of loan - the manner of repayment of loan cannot affect the cost of asset. The actual cost...

SEBI issued notification specifying NBFCs and HFCs regulated by RBI as qualified buyers under SARFAESI Act, 2002. The notification supersedes previous directive from...

Determination of cost of Acquistion of assets - reduction of amount subsidy from cost - entertainment subsidy being for the promotion of cinema/ multiplex industry; only...

Claim of depreciation - capitalisation being pre-commencement rent and other expenditure incurred - Section 32 of the Act allows depreciation on actual cost of the...

Initiation of CIRP - Whether the Assignment Agreement being unregistered document could not have been relied by the Adjudicating Authority for admitting Section 7...

CIRP - Maintainability of application u/s 7 r.w.s. 10A - default in repayment of term loan - there was default committed before implementation of the Plan, as NPA was...

Taxability of subsidy received under TUF scheme - revenue or capital receipts or reduction in value of fixed assets - to reduce from the cost of asset, the subsidy...

Capital Gain - property received by way of gift - Cost of acquisition of the asset shall be the cost for which the previous owner of the property acquired it, as...

The High Court's judgment addressed the interpretation of Section 43A regarding losses arising from exchange rate fluctuations on foreign currency loans utilized for...

The ITAT dismissed the revenue's appeal against the CIT(A)'s order deleting the addition made u/s 28(iv) for assets received free of cost from the assessee's associated...

Defining the cost of acquisition in case of certain assets for computing capital gains - 'Cost of acquisition’ and ‘cost of improvement’ of certain assets like...

LTCG - Computation of cost of acquisition of the property - Unless the Assessing Officer proves that the assessee has demolished existing building and dismantled...

Capital gain tax - cost of acquisitionn - the long terms capital gains has to be from the date from which the capital asset in question was held by the previous owner...

Quick Updates: