INCOME TAX OFFICER v. SRIGANGANAGAR FERTILISERS CORPORATION
[Citation -1987-LL-0130-2]

Citation 1987-LL-0130-2
Appellant Name INCOME TAX OFFICER
Respondent Name SRIGANGANAGAR FERTILISERS CORPORATION
Court ITAT
Relevant Act Income-tax
Date of Order 30/01/1987
Assessment Year 1983-84
Judgment View Judgment
Keyword Tags investment allowance
Bot Summary: A.KALYANASUNDHARAM, A.M. In this appeal by the Department, the main issue is regarding the subsidy granted by the State Govt. Is to be deducted from the cost of the generator for purposes of depreciation and investment allowance and the consequent effect of such decision on the interest under s. 215. On the issue of subsidy, the Bench has always been following the decision in Pioneer Match Works vs. ITO 15 TTJ 88: 3 ITD 714 and holding that subsidy is a grant for purposes of industrialisation and the amount of grant is calculated with relevance to the cost of assets invested by the assessee, and this by itself does not mean that it is a contribution by the Govt. Or any authority, as the cost of investments is used as a measure for arriving at the quantum of subsidy. We upheld the order of the CIT on this issue and hold that the subsidy is not be deducted from the cost of generator for allowing of depreciation and investment allowance. The interest under s. 215 is only consequential as it has been observed by the CIT that there was no liability as a consequence of assessment. We uphold the order of the CIT even on this ground and dismiss the departmental appeal.


A.KALYANASUNDHARAM, A.M. In this appeal by Department, main issue is regarding subsidy granted by State Govt. is to be deducted from cost of generator for purposes of depreciation and investment allowance and consequent effect of such decision on interest under s. 215. On issue of subsidy, Bench has always been following decision in Pioneer Match Works vs. ITO (1983) 15 TTJ (Mad) 88: (1983) 3 ITD 714 (Mad) and holding that subsidy is grant for purposes of industrialisation and amount of grant is calculated with relevance to cost of assets invested by assessee, and this by itself does not mean that it is contribution by Govt. or any authority, as cost of investments is used as measure for arriving at quantum of subsidy. We, therefore, upheld order of CIT (A) on this issue and hold that subsidy is not be deducted from cost of generator for allowing of depreciation and investment allowance. interest under s. 215 is only consequential as it has been observed by CIT (A) that there was no liability as consequence of assessment. We uphold order of CIT (A) even on this ground and dismiss departmental appeal. *** INCOME TAX OFFICER v. SRIGANGANAGAR FERTILISERS CORPORATION
Report Error