TaxTMI 
TaxTMI 
1999 (12) TMI 4
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....the facts and circumstances of the case, the Appellate Tribunal was right in law in holding that depreciation was not admissible on 30 percent value of the plant and machinery received from Indian Dairy Corporation? (iii) Whether, on the facts, the Appellate Tribunal was right in law in holding that 30 percent of value of the plant and machinery received from Indian Dairy Corporation was not to be included in the computation of the capital employed for the purpose of granting relief under section 80J?" The assessee, Mehsana District Co-operative Milk Producers' Union Limited, Mehsana, a co-operative society registered under the provisions of the Gujarat Co-operative Societies Act, 1961, was assessed for the assessment years 1976-77 and 1....
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....ection 40(a) of the Income-tax Act, 1961, which reads as under: "Notwithstanding anything to the contrary in sections 30 to 39, the following amounts shall not be deducted in computing the income chargeable under the head 'Profits and gains of business or profession', (a) in the case of any assessee-... (ii) any sum paid on account of any rate or tax levied on the profits or gains of any business or profession or assessed at a proportion of, or otherwise on the basis of, any such profits or gains." The Tribunal expressed its opinion that the amount is to be paid not in order to earn income, but by way of application of income. Therefore, there can be no question of treating the said amount as expenditure. For the aforesaid purpose, th....
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....g real profit, the amount should be taken into consideration or not is the real question. In the case of CIT v. Kaira District Co-operative Milk Producers' Union Ltd. [1994] 209 ITR 898 (Guj), the question referred to the court was as under: "3. Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal has been right in law in allowing a deduction of Rs. 21,203 being the contribution made to the Gujarat State Co-operative Union under section 69 of the Gujarat State Co-operative Societies Act?" In view of the decisions referred to above, viz., in the case of Mehsana District Co-operative Milk Producers' Union Ltd. v. CIT [1993] 203 ITR 601 (Guj) and CIT v. Kaira District Co-operative Milk Producers' U....
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....r of Income-tax (Appeals), the relevant portion of which is reproduced hereunder: "Indian Dairy Corporation had imported the machinery in question and supplied the same to the appellant under loan-cum-grant assistance scheme. To the extent to which the cost of the machinery was covered by the grant, it amounts to the cost being met directly or indirectly by any other person or authority and, therefore, the value of such grant is rightly reduced by the Income-tax Officer from the actual cost of the machinery in question while allowing the depreciation. The appeal on this point fails." The apex court has pointed out that the expression, "actual cost" needs to be interpreted liberally. The subsidy of the nature we are concerned with, does no....