2013 (10) TMI 214

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....  "(i) Whether on the facts and in the circumstances of the case, the Tribunal was within its rights in giving a direction to the Assessing Officer that he must allow the depreciation on the actual cost reduced by the amount of such subsidy under sec.43(1) of the Income Tax Act, 1961 ?      (ii) Even if the reply to the above question is in the affirmative, whether the Tribunal was right in law in holding that the portion of the actual cost is met directly or indirectly by the above subsidy as required by section 43(1), and therefore, the Assessing Officer must allow depreciation on such reduced cost (actual cost less subsidy) ?" 2. The assessee is a company engaged in the business of manufacture having its un....

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....round No.2 is partly allowed as indicated above." 4. On 08.01.2013, after hearing learned counsel Mr. J.P. Shah, we have issued notice for final disposal, making following observations:      "Question No.1 reproduced above pertains to assessee's contention that the Tribunal had no power to give any such consequential directions, having once held that the Commissioner (Appeal) was correct in treating the receipt as capital in nature. Question No.2 pertains to the assessee's contention that it is not in every case that the moment a receipt is treated as capital in nature, it must go on to reduce the cost of acquisition of the depreciable assets and that therefore for the purpose of depreciation, the value of the capi....

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....ven a hearing. Secondly, in essence, what the Tribunal did by passing the earlier noted consequential direction was to allow the Revenue's appeal partially. Insofar as the Revenue's stand that the receipt was revenue in nature was not accepted. However, insofar as the consequential relief prayed for by the Revenue, albeit, through an oral contention, that in case the Tribunal holds that the receipt was capital in nature the same should go to reduce the cost of acquisition was accepted. In fact, the Tribunal did so specify in the order itself by recording that ground No.2 is partially allowed.      The sum total of the above discussion is that in essence, what the Tribunal did was to allow the Revenue's appeal in part.....

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....d., 183 ITR 591.      (ii) Mehesana Distt. Coop. Milk Pro. Union v. CIT ., 258 ITR 780.      (iii) CIT v. Swastik Sanitary Works Ltd. , 286 ITR 544.      Issue notice for final disposal for consideration of question No.2 only, returnable on 12th February, 2013." 5. We may record that against the very same judgment of the Tribunal insofar as it held that the sales tax benefits received by the assessee were in the nature of capital receipt, the revenue had approached this Court by filing Tax Appeal No.450/2012 and connected appeals. Such appeals came to be dismissed by judgment dated 28.01.2013. In the upheld view of the Tribunal, whether receipts are capital in nature. I....