COMMISSIONER OF INCOME TAX Vs. RAVAL PAPERS LTD

JUDGEMENT

(1.) IN this reference under s. 256(2) of the IT Act, 1961 for the asst. yr. 1984-85 the following question has been referred to this Court :

(2.) SHORTLY stated, the facts relating to this reference are that the assessee in the above period received capital subsidy under the Central Investment Subsidy Scheme, 1971 for setting up an industrial unit at Rai Bareli, a backward area in U.P. The AO, while working out the permissible depreciation, deducted the amount of subsidy received from the cost of assets under s. 43(1) of the said Act and allowed depreciation on the reduced amount.

(3.) THE Tribunal after considering the rival submissions of the parties, upheld the order of the CIT (A) with the following observations: