TaxTMI 
TaxTMI 
1994 (3) TMI 66
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....eived by the assessee as subsidy should not go to reduce the cost of the asset for the purpose of allowing depreciation ? 2. Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the assessee was entitled to weighted deduction under section 35B of the Income-tax Act, 1961, on Rs. 12,828 paid as premium to the Export Credit Guarantee Corporation ?" The question referred at the instance of the assessee is : "3. Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the assessee was not entitled to weighted deduction under section 35B on Rs. 1,51,651 being the levy by the Coir Board which was refunded to the assessee during a subsequent assessment year ....
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.... the Coir Board was subsequently refunded to the assessee. The fact that that amount was refunded was not disputed by the assessee before the Tribunal. But the stand taken by the assessee before the Tribunal was that the refund should not stand in the way of allowing weighted deduction in the assessment year and that the proper course will be to withdraw the relief, if it is legally possible to do so, in the assessment year during which the levy was returned. The Tribunal did not accept this contention of the assessee. The short question that arises for consideration is whether the levy made by the Coir Board can be treated as an expenditure incurred by the assessee. For an amount to be an expenditure as per the Supreme Court in Indian Mol....
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....deduction. This is clear from the following finding arrived at by the Tribunal in paragraph 9 of its order : " There is no justification for allowing weighted deduction when the amount itself has been refunded to the assessee." This, according to us, means that weighted deduction was disallowed on the ground that the assessee had not incurred "expenditure" of Rs. 1,51,651 for getting the entitlement to have weighted deduction. Learned counsel representing the assessee raised a contention that the deduction of Rs. 1,51,651 was proper and that the amount is entitled to weighted deduction under section 35B of the Act. If during the subsequent year, the Coir Board refunds the amount of Rs. 1,51,651, it is argued, that must be brought to tax....