Subsidy not deductible from asset cost for depreciation and investment allowance; binding precedent made a further reference unnecessary.

Subsidy was held not to be deductible from the cost of assets while computing depreciation and investment allowance, because the Supreme Court had already settled that principle. In light of that binding precedent, the High Court found no useful purpose in directing a reference on the same question. The issue was therefore answered against the Revenue and in favour of the assessee, and the reference application was dismissed.

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Issues: Whether the Tribunal was justified in directing that subsidy should not be deducted from the cost of assets while computing depreciation and investment allowance, and whether a reference on that question was warranted.

Analysis: The issue was already concluded by the Supreme Court, which had held that subsidy is not to be deducted from the cost of the assets for the purpose of depreciation and investment allowance. In view of that binding pronouncement, no useful purpose would be served by requiring a reference of the question to the High Court.

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

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