Court rules subsidy from SIPCOT doesn't reduce plant cost for tax purposes

The High Court of Madras held that the subsidy received from SIPCOT did not reduce the actual cost of plant and machinery for depreciation and development rebate, following the precedent set in Srinivas Industries v. CIT [1991] 188 ITR 22. The ruling favored the taxpayer, with no costs awarded.

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The High Court of Madras, in a tax case reference under section 256(1) of the Income-tax Act, 1961, ruled that the subsidy received from SIPCOT did not reduce the actual cost of plant and machinery for depreciation and development rebate. The court cited a recent decision in Srinivas Industries v. CIT [1991] 188 ITR 22 and ruled in favor of the taxpayer. No costs were awarded.

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