Tribunal Adjusts Deductions & Depreciation for Appellant

The Tribunal partly allowed the appellant's appeal by directing the AO to re-compute deduction under section 10A, excluding uncredited remittances from export turnover. Additionally, the Tribunal allowed the claim for depreciation on plant and machinery, as the subsidy received was deemed general and not specific to any asset.

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Issues:
1. Disallowance of deduction under section 10A.
2. Disallowance of depreciation on plant and machinery.

Issue 1: Disallowance of deduction under section 10A:
The appellant contested the disallowance of deduction under section 10A for export proceeds not received within the stipulated period. The AO disallowed the claim due to lack of concrete proof of remittances being received in India. The CIT(A) upheld the disallowance stating that the certificate provided did not prove the remittances were credited to the appellant's account. The appellant argued that the remittances were received by bankers in India, fulfilling statutory requirements. The Tribunal noted that unless remittances were credited to the appellant's account or the bank's account, they were not considered received in India. The Tribunal directed the AO to re-compute deduction under section 10A, excluding the uncredited remittances from export turnover.

Issue 2: Disallowance of depreciation on plant and machinery:
The dispute centered on the reduction of depreciation due to a subsidy received by the appellant. The AO reduced depreciation corresponding to the subsidy amount, which the CIT(A) confirmed. The appellant argued that the subsidy was general and not specific to any asset, thus should not reduce asset cost. The Tribunal observed that the subsidy letter did not specify it was for any particular asset. As the subsidy was not granted for a specific asset, the disallowance of depreciation corresponding to the subsidy was unwarranted. The Tribunal set aside the CIT(A)'s decision, allowing the appellant's claim for depreciation.

In conclusion, the Tribunal partly allowed the appellant's appeal, directing the AO to re-compute deduction under section 10A and allowing the claim for depreciation on plant and machinery due to the general nature of the subsidy received.

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