2011 (6) TMI 853

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....Shortly stated facts are as follows: 2.1 The assessee is engaged in generation of power by installing windmills besides being involved in other manufacturing activities. During the assessment year in question i.e.A.Y. 2004-05, the assessee had installed windmills and received subsidy of Rs. 10,10,59,625/- from the State Government for the same. Subsidy was with respect to Sales Tax payable. The assessee's contention was that subsidy was not linked to any capital asset and accordingly, the same should not be reduced from the cost of asset for the purpose of granting depreciation. 3. Assessing Officer, however, held the view against the assessee reduced the amount of subsidy from the depreciation claimed by the assessee on the cost of t....

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.... contention of the appellant that the cost of acquisition has been determined in past year and the W.D.V. has to be worked out on the basis of such original cost reduced by depreciation actually allowed and therefore there is no scope for reducing W.D.V. by the amount of incentive. In view of the facts and more particularly the nature of incentive it is quite clear that the assessee's case is not hit by the insertion of explanation 10 to sec.43(1) and that it is covered by the decision of Supreme Court in P.J. Chemicals reported in 210 ITR 830. We accordingly reject this ground of revenue's appeal". 6. Having heard learned counsel for the revenue, we are of the opinion that Tribunal committed no error. CIT (A) as well as Tribunal b....