Court rules subsidy not deductible from asset cost; discrepancies in stock valuation; factual decision, no legal question.

The court held that the subsidy received should not be deducted from the cost of assets for depreciation and investment allowance, based on a previous Supreme Court decision. Regarding the valuation of closing stock, the Tribunal found discrepancies between the stock declared for a loan and the books of account. The Income-tax Officer added the discrepancy amount to gross profit, but the Appellate Tribunal disagreed, stating the stock declared in the return should be considered correct. As the Tribunal's decision was factual, the court concluded no legal question arose, rejecting the tax case petitions.

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Issues involved:
- Interpretation of the treatment of subsidy received in relation to cost of assets for depreciation and investment allowance.
- Discrepancy in the valuation of closing stock leading to addition of amount towards gross profit.

Interpretation of subsidy received:
The court referred to a previous Supreme Court decision stating that Central subsidy received should not be reduced from the cost of assets for depreciation and investment allowance. Therefore, the court concluded that this issue was not a referable question of law.

Valuation of closing stock:
The assessee had discrepancies in the valuation of closing stock declared to the bank for obtaining a loan compared to the stock in the books of account. The Income-tax Officer added the discrepancy amount to the gross profit declared. The Deputy Commissioner (Appeals) upheld this addition, but the Appellate Tribunal disagreed. The Tribunal held that the closing stock declared in the return, based on the books of account, should be considered correct. The Tribunal found no evidence that the stock declared to the bank was based on actual quantities or verified by the bank. As the Tribunal's decision was based on factual findings, the court concluded that no referable question of law arose. Therefore, the court rejected the tax case petitions, holding that both issues were not referable questions of law.

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