V.K. SINGHAL, J. - (1.) THE Tribunal has referred the following question of law arising out of its order dt. 28th Nov., 1986 in respect of the asst. yr. 1981-82 under s. 256(1) of the IT Act, 1961 : "Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the amount of Central Government subsidy is not deductible from the money cost to the assessee of its plant, machinery and building while computing the original cost thereof under s. 43(1) of the IT Act, 1961 for the purpose of allowing depreciation or investment allowance, etc?"
(2.) THE matter with regard to the interpretation of s. 43(1) of the IT Act for determining the actual cost of plant, machinery and building, etc., was considered by this Court in the case of CIT vs. Ambica Electrolytic Capacitors Pvt. Ltd. (1991) 91 CTR (Raj) 49 : (1991) 191 ITR 494 (Raj) : TC 29R.386 and it was held that the amount of subsidy received by the assessee from the Government is not to be deducted from the cost of plant, machinery and building, etc. It was also held by this Court that the subsidy or investment subsidy given by the Government for the development of industries in backward areas cannot be deducted from the actual cost for purpose of depreciation or investment allowance. In view of the above decision, the reference is answered in favour of the assessee and against the Revenue. No order as to costs.;