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TMI Blog1996 (10) TMI 61X X X X Extracts X X X X X X X X Extracts X X X X ..... s filed under section 256(2) of the Income-tax Act, 1961, by the Revenue, a prayer has been made for directing the Income-tax Appellate Tribunal to refer the question of law as to whether the Tribunal has been right in law in holding that the capital subsidy received by the assessee should not be deducted from the value of the assets while working out the cost for allowing depreciation. For the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppeals), Chandigarh, who directed the Inspecting Assistant Commissioner (Assessment) to allow depreciation on machinery and plant without reducing the cost of subsidy form the actual cost of plant and machinery. Feeling dissatisfied with the order of the Commissioner of Income-tax (Appeals), the Revenue filed an appeal before the Income-tax Appellate Tribunal. That appeal was dismissed by the Trib ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed because the two decisions on which reliance has been placed by Shri Mahajan stand reversed/overruled by the Supreme Court in CIT v. P. J. Chemicals Ltd. [1994] 210 ITR 830. Their Lordships of the Supreme Court were considering the appeals filed by the Department against the judgments of the Andhra Pradesh High Court and some other courts including this court on the issue of deduction of subsidy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Income-tax Act, 1961, needs to be interpreted liberally. Such a subsidy does not partake of the incidents which attract the conditions for its deductibility from 'actual cost'. The amount of subsidy is not to be deducted from the 'actual cost' under section 43(1) for the purpose of calculation of depreciation, etc." In view of the authoritative pronouncement of the Supreme Court and the fact t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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