B.R.ARORA, J. - (1.) THE Tribunal, Jaipur Bench, Jaipur, for the asst. yr. 1982-83, at the instance of the Revenue, referred the following questions of law for the opinion of the High Court under S. 256(1) of the IT Act : "Whether on the facts and in the circumstances of the case the Tribunal was legally justified in : (1) confirming the view taken by the CIT(A) that cash assistance of Rs. 79,328 is not liable to be taxed; (2) holding that while computing depreciation and relief under S. 80J the cost of assets should not be reduced by the amount of subsidy received by the assessee; and (3) in holding that deduction under S. 80HH should be allowed before deducting deduction under s. 35B ?"
(2.) THE material facts, on the basis of which question No. (1) 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. (1) 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 assistance of Rs. 79,323 is liable to be taxed. So far as question No. (2) is concerned, an identical question came up for consideration before Division Bench of this Court in the case of CIT vs. Ambica Electrolytic Capacitors (P) 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 the aforesaid judgments, question No. 2 is answered in favour of the assessee and against the Revenue.
(3.) AS regards question No. 3, the identical question came up for consideration before us in CIT vs. Vishnu Oil & Dal Mills (D.B. IT Ref. No. 1 of 1991 decided on 13th Nov., 1995) [reported at (1996) 132 CTR (Raj) 132 : TC S25.2565] in which we have answered this question as under : "If we read S. 80HH with S. 80AB of the Act then it is very much clear that for the purpose of determination of the relief under S. 80HH of the Act, the gross total income of the assessee has to be worked out after deducting unabsorbed loss and unabsorbed depreciation and the income eligible for deduction under S. 80HH will be the net income as computed in accordance with the provisions of the Act and not the gross income." As such, in view of the decision given on identical question in Vishnu Oil Mills' case (supra), question No. 3 is answered in favour of the Revenue and against the assessee.;