1985 (1) TMI 128

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....st. yr. 1982-83. In the course of the assessment proceeding for the year under consideration the assessee claimed full depreciation on the building and machinery as per the last record. The ITO, however, deducted the amount of subsidy received by the assessee from the Director of Industries, Chandigarh from the value of the written down value by resorting to s. 43(1) of the IT Act, 1961 on the rea....

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....sessee received subsidy from the government. It is also pointed out that the decision of the AAC is contrary to the judgment of the Allahabad High Court in the case of M/s Lucknow Products Cooperative Milk Union Ltd. vs. CIT (1983) 34 CTR (All) 81. On the other hand, Shri V. S. Jain, ld. counsel of the assessee supported the order of the AAC. According to him the subsidy received by the assessee i....

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.... was no direct nexus between the amount of subsidy and the cost of fixed capital investment made by the assessee. On the above facts we agree with the AAC that the decision of the Special Bench of the Tribunal referred to above fully covers the issue and the assessee is not bound to deduct the subsidy amount from the written down value of the capital assets. The decision of the Hon'ble High Court ....