Depreciation and additional depreciation claims were upheld, while unsupported business expenditure was partly disallowed for lack of evidence.

Project subsidy received for acquisition of plant and machinery was not required to be reduced from actual cost for depreciation, as the issue had been consistently decided in the assessee's favour in earlier years. Additional depreciation was also allowed in the succeeding year where the machinery had been put to use for less than 180 days, following co-ordinate bench precedent in the assessee's own case. However, a 50% disallowance of expenditure on Mahila Netrutva Vikas Gokul Gram was sustained because the assessee failed to produce complete supporting vouchers and bills, and relied mainly on ledger extracts and self-made vouchers.

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Issues: (i) whether project subsidy received for acquisition of plant and machinery had to be reduced from the actual cost for depreciation purposes; (ii) whether the assessee was entitled to additional depreciation in the succeeding year where the machinery was put to use for less than 180 days; (iii) whether 50% disallowance of expenditure on Mahila Netrutva Vikas Gokul Gram was justified for want of supporting vouchers and bills.

Issue (i): whether project subsidy received for acquisition of plant and machinery had to be reduced from the actual cost for depreciation purposes.

Analysis: The subsidy was received towards purchase of machinery and the lower authorities had allowed depreciation without reducing the subsidy amount from the actual cost. The issue had already been decided in the assessee's own case in earlier years, and the same view had been followed consistently.

Conclusion: The adjustment made by the Assessing Officer was not sustained, and the Revenue failed on this issue.

Issue (ii): whether the assessee was entitled to additional depreciation in the succeeding year where the machinery was put to use for less than 180 days.

Analysis: The claim was supported by earlier co-ordinate bench decisions in the assessee's own case. The consistent view accepted that where the asset was put to use for less than 180 days, the balance additional depreciation could be claimed in the succeeding year under the applicable provision.

Conclusion: The allowance of additional depreciation was upheld, and the Revenue failed on this issue.

Issue (iii): whether 50% disallowance of expenditure on Mahila Netrutva Vikas Gokul Gram was justified for want of supporting vouchers and bills.

Analysis: The assessee did not produce complete documentary evidence in support of the expenditure and relied mainly on ledger extracts and self-made vouchers. The evidentiary deficiency justified the disallowance to the extent made by the Assessing Officer.

Conclusion: The disallowance was sustained, and the Revenue succeeded on this issue.

Final Conclusion: The appeal was disposed of by upholding the Revenue's challenge only in respect of the expenditure disallowance, while the other additions were not sustained.

Ratio Decidendi: A depreciation or business-expense claim must be supported by the applicable statutory conditions and credible evidence, and earlier consistent decisions in the assessee's own case may be followed on identical issues.

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