COMMISSIONER OF INCOME TAX Vs. SUNIL AND CO

JUDGEMENT

(1.) THE Tribunal, Jaipur Bench, Jaipur, at the instance of the Revenue, under S. 256(1) of the IT Act, has referred the following questions of law for the opinion of this Court :

(2.) AN identical question to question No. (i) referred above, came up for consideration before the Division Bench of this Court in the case of CIT vs. Ambica Electrolytic Capacitors Pvt. Ltd. & Ors. (1991) 91 CTR (Raj) 49 : (1991) 191 ITR 494 (Raj) : TC 29R.386 and before the Hon'ble Supreme Court in the case of CIT vs. P.J. Chemicals Ltd. (1994) 121 CTR (SC) 201 : (1994) 210 ITR 830 (SC) : TC 29R.367. For the reasons given in CIT vs. Ambica Electrolytic Capacitors Pvt. Ltd. & Ors. (supra) and CIT vs. P.J. Chemicals Ltd. (supra), question No. (i) is answered in favour of the assessee and against the Revenue.

(3.) CONSEQUENTLY , the reference is answered as under : Question No. (i) : Question No. (i) is answered in favour of the assessee and against the Revenue and it is held that the amount of subsidy received by the assessee should not be deducted from the cost of the assets for the purpose of allowing depreciation. Question No. (ii): Question No. (ii) is answered in favour of the Revenue and against the assessee and it is held that the investment allowance has to be deducted from the commercial profits for determining relief under S. 80HH of the Act.