- (1.) ON an application filed under S. 256(2) of the IT Act, 1961, the assessee prays that Tribunal be directed to refer the following question, as set out in para 6 of the reference application for the opinion of this Court: "Whether, on the facts and in the circumstances of the case and in law, the Tribunal was justified in upholding the decision of the CIT(A), who has directed the AO to allow depreciation by taking into consideration the written down value or the cost of the assets as the case may be and without making any deduction on account of the amount of subsidy therefrom ?"
(2.) THE admitted facts are that the subsidy has been given as incentive for the establishment of the factory in backward area. Their Lordships of the apex Court in the case of CIT vs. P.J. Chemicals Ltd. (1994) 121 CTR (SC) 201 : (1994) 210 ITR 830 (SC) : TC 29R.367 have taken the view that if the subsidy is given by the Government as incentive for setting-up of industry in the backward area, that amount of subsidy cannot be deducted in computing the actual cost of assets under s. 43(1) of the Act. Considering the view of their Lordships in the case of CIT vs. P.J. Chemicals Ltd. (supra), no case is made out for notice. The application filed under S. 256(2) is rejected.;