9911796707
TMI Blog1986 (5) TMI 72X X X X Extracts X X X X X X X X Extracts X X X X ..... iation should be allowed to the assessee without deducting the central subsidy received by the assessee." 3. The assessee is a limited company deriving income from the manufacture and sale of Asbestos. The assessment years involved in these three appeals are 1979-80, 1980-81 and 1981-82. The assessee received certain amounts as subsidy under the Central investment subsidy scheme. This scheme applied to the industrially backward districts/areas, as listed in the annexure to the scheme. According to the scheme, the new industrial units engaged in manufacture of certain items are eligible to claim 10 per cent to 15 per cent central investment subsidy under the said scheme. The amount is calculated at 10 per cent to 15 per cent of the fixed c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from. 5. Shri R. C. Joshi, ld. Representative for the Department urged before us that the CIT(A) erred in his decision. He relied on the following cases in support of his contentions: 1. 1. CIT vs. Ambala Cantt. Electric Supply (1971) 82 ITR 217 (P H) 2. CIT vs. Hides Leather Products (1975) 101 ITR 61 (Guj) 3. Lucknow Producers Cooperative Milk Union vs. CIT (1983) 34 CTR (All) 81 : (1983) 143 ITR 60 (All). 6. Shri H. Khound, ld. Representative for the assessee, on the other hand, stated that the decision relied on the ld. Representative for the Department are either distinguishable on facts or has been considered by the Special Bench of the Tribunal in the case of Pioneer Match Works vs. ITO (1982) 1 SOT 331 (Mad) (SB) and th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cessarily be defrayed form the assessee s now resources. Consequently, that case was decided in favour of the assessee inasmuch as the depreciation was allowed on the entire cost of the asset without deducting the recovery form the customers therefrom. Hence, we do not find this case to be of any help to revenue. On the contrary the aforesaid two decisions have considered the matter from all angles and come to the categorical finding that where lump sum subsidy is given for encouraging the industrialisation of backward areas without any intention to reduce the cost of any plant and machinery, then such subsidy cannot be deducted from the cost of plant and machinery, for the purpose of allowing depreciation or investment allowance. Respectfu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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