Scope for reduction of actual cost of plant and machinery by waiver of loan amount when loan was not given directly or indirectly for purchasing plant and machinery
The word “waiver” does not fall into either of the three terms “subsidy”, “grant” and “reimbursement” used in Explanation 10 to section 43(1) of the Income-tax Act, 1961 or proviso thereof; where plant and machinery were already existing prior to taking the loan, it could not be inferred that it was given to meet the cost of plant and machinery; once, the amount of loan waived by the lender, could not be related to purchase of plant and machinery, it could not be reduced from the cost for the purposes of reducing allowable depreciation.
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