Depreciation allowed on capital expenditure on account of payment of customs duty

Directions issued by the Customs Department, the payment of customs duty has been made though the same has been shown as advance or a note has been appended in the accounts for contingent liability. Therefore, in our view the Assessee has made the payment of customs duty only when the liability has accrued on it. Since the customs duty has been paid to acquire the plant and machinery and therefore, it has to be capitalized, moreover, there is no dispute to the fact that such expenditure cannot be capitalised as observed by the assessing officer

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