COMMISSIONER OF INCOME TAX Vs. SYNTHETIC STONES

JUDGEMENT

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

(2.) THE material facts, on the basis of which question No. (a) is to be decided, are similar to the facts in D.B. IT Ref. No. 7 of 1990, CIT vs. Saboo Emery Stones [reported at (1996) 220 ITR 295 (Raj) : TC S13.1399] and the above quoted question No. (a) is identical with the question which was for decision in D.B. IT Ref. No. 7 of 1990. For the same reasons given in CIT vs. Saboo Enery Stones's case (supra), this question is decided in favour of the Revenue and against the assessee and it is held that the cash compensatory support (by whatever name it may be called) is liable to tax under the provisions of the IT Act.

(3.) CONSEQUENTLY , the reference is answered as under : Question No. (a) : Question No. (a) is answered in favour of the Revenue and against the assessee and it is held that the cash compensatory support (by whatever name it may be called) is liable to tax under the provisions of the IT Act. Question No. (b) : Question No. (b) is answered in favour of the assessee and against the Revenue and it is held that the amount of subsidy is not liable to be deducted from the 'actual cost' under s. 80J for the purpose of calculation of the depreciation, etc.