- (1.) BY this application filed under S. 256(2) of the income-tax, Revenue prays that Tribunal be directed to refer the following questions for the opinion of this Court : 1. Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that subsidy of Rs. 1,57,000 received by the assessee from Central Government was not to be reduced from the cost of the assets for the purpose of depreciation allowance ? 2. Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that subsidy of Rs. 1,57,000 received by the assessee from Central Government was not to be reduced from the cost of the assets for the purpose of computing rebate under S. 80J ?
(2.) THE issue before us for consideration is as to whether the subsidy should be reduced from the actual cost as defined under S. 43(1) of the Act or not ? This issue has already been concluded by the Hon'ble apex Court in the case of CIT vs. P.J. Chemicals Ltd. (1994) 121 CTR (SC) 201 : (1994) 210 ITR 830 (SC). At p. 841 their lordships observed as under : "The Government subsidy, it is not reasonable to say, is an incentive not for the specific purpose of meeting a portion of the cost on the assets, though quantified as or geared to a percentage of such cost. If that be so, it does not partake of the character of a payment intended either directly or indirectly to meet the "actual cost". We should prefer the reasoning of the majority of the High Courts to the one found acceptable by the High Court of Punjab and Haryana." Following the view taken by the Hon'ble apex Court in the case of CIT vs. P.J. Chemicals Ltd. (supra), no case is made out for direction to the Tribunal for referring the aforesaid questions for our opinion. The application filed under S. 256(2) of the IT Act, 1961, is rejected.;