- (1.) IN all these cases under section 256(1) of the Income Tax Act, the question formulated for consideration is whether on the fact and circumstances of the case, the Tribunal was right in holding that the amount of actual subsidy was not deductible in computing the actual cost on assets as defined under section 53 of the Income Tax Act for the purpose of calculating depreciation and investment allowance admissible to the assessee.
(2.) MR . Poddar, learned counsel appearing on behalf of the assessee, submitted that the conflicting views of the different High Courts have been set at rest by the Supreme Court in the case reported in 1994(121) CTR ¦ 201(SC)= 1994(210) ITR 830(SC). The Supreme Court answered the question holding that the subsidy received from the Government under the Industrial Scheme as an incentive and not for specific purpose of meeting the portion of cost was assessed, though quantified as a percentage of such cost, and the same is therefore not deductible from the actual cost for the purpose of calculation of depreciation etc. Mr. Jhunjhunwala, learned counsel appearing on. behalf of the Revenue, very fairly conceded that the question has been set at rest by the Supreme Court in the decision referred to hereinabove.
(3.) WE , therefore dispose of these reference cases in terms of the question referred to by the Supreme Court in the aforementioned decision.;