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C.I.T. v. M/S A.C.Grih - INCOME TAX REFERENCE No. 209 of 1992  RD-AH 613 (3 March 2005)
I.T.R. No. 209 of 1992
Commissioner of Income Tax, Lucknow
M/s Adarsh Sheet Grih, Hardoi
Hon'ble R.K.Agarwal, J.
Hon'ble Prakash Krishna, J.
The Income Tax Appellate Tribunal, Allahabad has referred the following question of law under section 256 (1) of the Income Tax Act, 1961 (here in after referred to as the Act) for opinion to this Court.
"Whether, on the facts and in the circumstances of the case, the Tribunal was in law legally justified in confirming the C.I.T. (A)'s finding that the amount of subsidy received or receivable from the U.P. State Government was not deductible from W.D.V. of the various assets for the purpose of calculation of depreciation on the same ?"
The reference relates to the assessment year 1983- 84.
Briefly, stated the facts giving rise to the present reference are as follows :-
The respondent/assessee is a firm and is running a cold storage. The State Government had sanctioned a capital subsidy of Rs. 196300/-. The Income Tax Officer deducted a sum of capital subsidy of Rs. 19300/- from the written down value of various assets for the purpose of calculating depreciation. The respondent feeling aggrieved, preferred an appeal before the Commissioner of Income Tax (Appeals), who had accepted the contention that the amount of capital subsidy is not be deducted from the written down value, which order has been upheld by the Tribunal.
We have heard Sri A.N. Mahajan, learned Standing Counsel for the Revenue. No body has appeared on behalf of the respondent/assessee.
We find that the Apex Court in the case of CIT Vs.. P.J. Chemicals Ltd. (1994) 210 ITR 830 has held that the amount of capital subsidy is not be deducted while determining the actual cost under Section 43 (1) of the Act for the purpose of depreciation etc.
Respectfully following the aforesaid decision, we are of the considered opinion that the Tribunal has not committed any illegality in upholding the order of the CIT (Appeals). We accordingly, answer the aforesaid question referred to us in the affirmative i.e. in favour of the assessee and against the Revenue. There shall be no order as to costs.
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