https://www.taxtmi.com/caselaws?id=25092 Subsidy granted for setting up industries in backward areas is a percentage measure of fixed capital investment and, absent a direct or indirect nexus to a specific capital asset, cannot be allocated against that asset to reduce its actual cost for depreciation. The court reasoned the scheme neither prescribes utilisation of the grant nor ties it to particular assets, and the subsidy may legitimately fund nondepreciable items, working capital, or loan repayment. Consequently the subsidy need not be deducted from asset cost and depreciation is allowable on the assessee's claimed asset cost; view affirmed in favour of the assessee. en-us Fri, 10 Jun 1988 00:00:00 +0530 Thu, 05 Feb 2026 23:01:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=25092 Subsidy granted for setting up industries in backward areas is a percentage measure of fixed capital investment and, absent a direct or indirect nexus to a specific capital asset, cannot be allocated against that asset to reduce its actual cost for depreciation. The court reasoned the scheme neither prescribes utilisation of the grant nor ties it to particular assets, and the subsidy may legitimately fund nondepreciable items, working capital, or loan repayment. Consequently the subsidy need not be deducted from asset cost and depreciation is allowable on the assessee's claimed asset cost; view affirmed in favour of the assessee. Case-Laws Income Tax Fri, 10 Jun 1988 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=25092