Depreciation on grant-funded plant and machinery upheld under a loan-and-grant scheme, following prior High Court precedent.

Depreciation was claimed on the 30% grant component of plant and machinery acquired under a 70% loan and 30% grant scheme. The Gujarat HC noted that the identical question had already been decided earlier by the same court in favour of the assessee and against the Revenue, and applied that prior ruling. The issue was therefore answered in the affirmative, recognising depreciation allowance on the grant-funded portion of the asset value.

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Issues: Whether depreciation was allowable on 30% of the value of plant and machinery received as grant under the 70% loan and 30% grant scheme.

Analysis: The assessment year was 1999-2000. The controversy had already been concluded by an earlier decision of the same High Court, which had answered the identical question in favour of the assessee and against the Revenue.

Conclusion: The question was answered in the affirmative, in favour of the assessee and against the Revenue.

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