ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -An example of the cost benefit principle can be seen when an individual is deciding whether to purchase a video game. If the cost of the game is $100 and there is another store which is selling it for $80, the individual should only buy the game if the cost of travelling to the other store is less than $20.

Detailed explanation-2: -A tax benefit is a provision that allows taxpayers to pay less in taxes than what they would owe if that benefit were not in place. Common tax benefits include deductions, credits, and exclusions. For example, a tax credit for qualified education expenses is a type of tax benefit.

Detailed explanation-3: -According to the benefit principle of taxation those who reap the benefits from government services should pay the taxes. The benefit principle holds that people should be taxed in proportion to the benefits they receive from goods and services provided by the government.

Detailed explanation-4: -As the assessee has paid the excise duty, pertaining to the earlier year, in the year under consideration, ITAT are of the view that such payment of excise duty is eligible for deduction in the current year.