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Judgment
This Judgment has been overruled by : Commissioner of Income Tax, Hyderabad Vs. M/s. P.J. Chemicals Ltd., AIR 1994 SC 2727 : (1994) 121 CTR 201 : (1994) 210 ITR 830 : (1994) 6 JT 330 : (1994) 4 SCALE 337 : (1994) 3 SCC 535 Supp : (1994) 3 SCR 561 Supp
S.S. Sodhi, J.—Both the questions referred for the opinion of this court stand covered by our earlier decisions. The questions posed are as under :
"(1) Whether, on the facts and in the circumstances of the case, the capital value of the work-in-progress during the accounting period relevant to the assessment year 1978-79 should be taken into account for inclusion in the capital computation base for computing the deduction u/s 80J of the Income Tax Act, 1961, and Rule 19A(2) of the Income Tax Rules, 1962?
(2) Whether, on the facts and in the circumstances of the case, the capital subsidy of Rs. 7,58,000 received by the assessee should be deducted from the value of the plant and machinery and building and sheds while working out the written down value for allowing depreciation to the assessee u/s 32 of the Act for the accounting period relevant to the assessment year 1978-79 ?"
The matter regarding the capital value of work-in-progress stands settled by our judgment in Income Tax Reference No. 145 of 1982 ( Commissioner of Income Tax Vs. Gopi Chand Textile Mills Ltd., , decided on February 27, 1989, and in terms thereof, this question is answered in the affirmative, in favour of the assessee and against the Revenue.
Turning now to the next question raised, which is with regard to capital subsidy, it has been held by us in our earlier decision in Income Tax Reference No. 22 of 1986 ( Commissioner of Income Tax Vs. Jindal Brothers Rice Mills, , decided on March 14, 1989, that the amount of subsidy received by the assessee has to be deducted from the value of the assets while working out its written down value for purposes of depreciation. In terms thereof, this question is answered in the affirmative, in favour of the Revenue and against the assessee.
This reference is disposed of accordingly. There will, however, be no order as to costs.