COMMISSIONER OF INCOME TAX Vs. RUCHIRA PAPERS LIMITED

JUDGEMENT

(1.) IN this tax reference, under Section 256(1) of the INcome-tax Act, 1961 (hereinafter referred to as "the Act"), at the instance of the Revenue, the following question of law has been referred for the opinion of this court, in respect of the assessment year 1986-87 :

(2.) IN Srinivas INdustries v. CIT [1991] 188 ITR 22 (Mad), I had occasion to consider an identical question and, on a consideration of the provisions of the scheme and the relevant provisions of the Act, as well as the view taken by the different courts on this question, it was held that the actual cost of assets cannot be reduced by the amount of subsidy received and Section 43(1) of the Act would be inapplicable. It is not in dispute that this decision would govern this reference as well. We, therefore, answer this question, referred to us, in the affirmative and against the Revenue. There is no order as to costs.