1990 (3) TMI 9

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....subsidy under the 'Central Outright Grant or Subsidy Scheme, 1971,' should not be deducted from the cost of the capital assets mainly plant and machinery and factory building ?" The assessment year involved is 1980-81 for which the relevant accounting year ended on June 30, 1979. The facts of this case, as is evident from the statement of case, are as follows: "The assessee is a private limited company. It derives income from the business in the manufacture and sale of raw silk fabrics. The assessment year involved in this reference is 1980-81, the relevant previous year was the year ending June 30, 1979. Under the Central Outright Grant or Subsidy Scheme, 1971, introduced by the Central Government and implemented by different S....

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....ently, it was held therein that no portion of the subsidy amount could be said to have been given specifically towards the acquisition of the fixed assets and so the cost of the fixed assets to the assessee could not be reduced by the amount of subsidy for the purpose of determining the written down value for the purpose of section 43(1) of the Act. Respectfully following the aforesaid decision of the Special Bench of the Tribunal, the Tribunal upheld the order of the Commissioner (Appeals) and dismissed the departmental appeal." In this case, both the Commissioner (Appeals) and the Tribunal relied on a Special Bench decision in the case of Dewas Textile Mills (P.) Ltd. which is a sister concern of the assessee-company. In that case, it ....