Grant for Equipment Must Be Deducted from Asset Cost for Depreciation; Clear Statutory Language Supports Deduction.

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....The grant received by the assessee towards plant and machinery and technical civil works is required to be reduced from the cost of assets for computing depreciation u/s 43(1) read with Explanation 10 of the Income Tax Act, 1961. The actual cost of assets is to be determined after reducing the portion of cost met directly or indirectly by any other person or authority. The grant received is directly attributable to meet the cost of plant and machinery and technical civil works, and hence, such portion is to be deducted from the value/cost of assets eligible for depreciation. The assessee's contention that the grant should not be reduced from the cost of assets is rejected, as the language of the statute is clear and requires literal interpretation. The judgment relied upon by the assessee is distinguished based on the peculiar facts and circumstances of the present case.....