The Income Tax Appellate Tribunal (ITAT), Kolkatta bench has held thata specified percentage of subsidy amount of gross value of the fixed asset as on the date of commercial production is not deductible u/s 43(1) read with Explanation 10 of the Income Tax Act 1961.
The appellant revenue alleged against the confirmation of subsidy received by the assessee which has not been deducted from the written down value (WDV) of a block of assets and issue relating to disallowance made u/s. 14A read with Rule 8D (2)(ii) & (iii) of the Income-tax Rules, 1962.
The respondent-assessee submitted that all the grounds of appeal taken by the revenue are covered by the decision of a coordinate bench of ITAT, Kolkata in favour of the assessee in its case in the preceding years from AYs. 2003-04 to 2013-14.
Coordinate Bench of ITAT, Kolkata observed that the amount of subsidy subject to a maximum of a specified percentage of the gross value of fixed assets as on the first date of commercial production/gross value of the additional fixed assets as on the first date of commercial products does not mean that the subsidy was given to finance the acquisition of fixed assets only. Under the given circumstances, the amount of subsidy is not deductible from the actual cost u/s 43(1) read with Explanation 10 of the Act.
The Assessee has filed the necessary charts showing their funds and investments to prove against the contention of revenue about the disallowance.In this regard,the assessee contended that own funds are sufficient to cover the investments that have to be considered for Sec.l4A disallowance.
The Coram consisting of Shri Rajpal Yadav, vice-president and Shri Girish Agrawal, AM found nothing on record to controvert discussions made and findings given by the Co-ordinate Bench in the case of assessee itself. The Tribunal upheld the findings given by CIT(A) and dismissed the appeal of the revenue.
Shri Deba Kumar Sonowal & Shri Tushar Dhawal Singh appeared on behalf of the revenue and Shri S. K. Tulsiyan & Ms Puja Somani appeared on behalf of the assessee.
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