Actual cost of assets u/s 43(1)
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
18 May 2018
Supplier of a machinery delayed the supply of machine by 3 months. As a part of breach of contract, he paid penalty to the customer. Now, as per judgement of Supreme Court, this receipt of penalty is a capital receipt in the hands of customer and it is not treated as taxable income. However, whether it is required to be deducted from the cost of assets u/s 43(1)?
19 May 2018
No need to deduct from cost because penalty has no relation or connection with the cost of the machinery.
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