(1.) THE Income Tax Appellate Tribunal, Delhi has referred the following question of law under section 256(2) of the Income Tax Act, 1961 (hereinafter referred to as 'the Act') for opinion to this Court. 'Whether on the facts and in the circumstances of the case, the Tribunal was in law justified in cancelling the order of the Income Tax Officer passed under section 154 of the Income Tax Act, 1961?'
(2.) THE reference relates to the assessment years 1981 -82 and 1982 -83. The respondent is a company assessed to income -tax in the status of firm. It had purchased a generator ending Diwali 1980 for a sum of Rs. 2,76,640. It claimed depreciation, additional depreciation and investment allowance on the aforesaid amount, which was allowed by the assessing officer by passing original assessment under section 143(3) of the Act. Subsequently, it was noticed by the assessing officer that the respondent had received capital subsidy from the Government of India for purchase of generator. He accordingly initiated proceedings under section 154 of the Act, proposing to deduct the amount of subsidy, while computing the cost/wdv of the generator for granting depreciation and deductions after giving opportunity of hearing. The Income Tax Officer had recomputed the cost of the generator by excluding the amount of subsidy. Feeling aggrieved the respondent preferred separate appeals before the Appellate Assistant Commissioner who had set aside the order passed under section 154 of the Act by holding that there was no mistake apparent from the record, which order has been upheld by the Tribunal.
(3.) WE accordingly, answer the aforesaid question referred to us in the affirmative, i.e., in favour of the assessee and against the revenue. There shall be no order as to costs.