Co-operative society's mandatory reserve and share capital fixed deposits with banks-interest treated as business income under 80P(2)(a)(iii) deductio...
Income tax reassessment reopening after four years on investigation tip, without s.147 proviso disclosure failure, struck down as borrowed satisfactio...
The dominant issue was whether financial support received under a state scheme for setting up a small hydro power project constituted a capital receipt requiring reduction of the cost of depreciable assets, thereby restricting depreciation. The Tribunal held the scheme's conditions showed the subsidy was an incentive to encourage entrepreneurs and was not linked to meeting the cost of any specific asset, including because disbursement could be deferred until commissioning and commercial generation. It further held s. 2(24)(xviii) was prospective and inapplicable to the relevant years. Consequently, reduction of asset cost and the resulting depreciation disallowance were set aside and depreciation was allowed in full - ITAT
The dominant issue was whether financial support received under a state scheme for setting up a small hydro power project constituted a capital receipt requiring reduction of the cost of depreciable assets, thereby restricting depreciation. The Tribunal held the scheme's conditions showed the subsidy was an incentive to encourage entrepreneurs and was not linked to meeting the cost of any specific asset, including because disbursement could be deferred until commissioning and commercial generation. It further held s. 2(24)(xviii) was prospective and inapplicable to the relevant years. Consequently, reduction of asset cost and the resulting depreciation disallowance were set aside and depreciation was allowed in full - ITAT
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