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The ITAT held that the assessee organisation cannot be granted exemption u/s 11 for the preceding assessment year 2012-13 as the registration u/s 12A was obtained in 2019, after the assessment was completed, and the relevant proviso stood omitted from 01.04.2023. The expenditure incurred on infrastructure creation is capital in nature, while maintenance and administration expenses are revenue expenses. The assessee is entitled to claim depreciation on infrastructure assets. The notional interest expenditure booked by treating the government grant as a loan is not allowable. The grant should be treated as income, and the assessee can claim depreciation on assets. The assessee was given an opportunity to rectify its accounts. The revenue's appeal was partly allowed.
The ITAT held that the assessee organisation cannot be granted exemption u/s 11 for the preceding assessment year 2012-13 as the registration u/s 12A was obtained in 2019, after the assessment was completed, and the relevant proviso stood omitted from 01.04.2023. The expenditure incurred on infrastructure creation is capital in nature, while maintenance and administration expenses are revenue expenses. The assessee is entitled to claim depreciation on infrastructure assets. The notional interest expenditure booked by treating the government grant as a loan is not allowable. The grant should be treated as income, and the assessee can claim depreciation on assets. The assessee was given an opportunity to rectify its accounts. The revenue's appeal was partly allowed.
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