Rc/5/2002 Of Commissioner Of Income Tax Hyd v. M/S Nagarjuna Steels Ltd Hyd

THE HON’BLE SRI JUSTICE V.V.S.RAOAND THE HON’BLE SRI JUSTICE B.N.RAO NALLA REFERRED CASE No.5 OF 2002 Dated:02.01.2012 Between: Commissioner of Income Tax, Hyderabad Applicant And M/s.Nagarjuna Steels Limited, Hyderabad .. Respondent .. THE HON’BLE SRI JUSTICE V.V.S.RAOANDTHE HON’BLE SRI JUSTICE B.N.RAO NALLA REFERRED CASE No.5 OF 2002 ORDER:(Per Hon’ble Sri Justice V.V.S.Rao) As directed by this Court in I.T.C.No.83 of 1994, dated22.11.1994, the Income Tax Appellate Tribunal has referred thefollowing question under Section 256(2) of the Income Tax Act,1961 (the Act, for brevity) for the opinion of this Court. Whether on the facts and in the circumstances of thecase, the Income Tax Appellate Tribunal was justified inholding that the Central subsidy granted should not bededucted from the cost of the capital assets of the assesseecompany for the purpose of allowing depreciation? The question referred to is squarely covered by thejudgment of the Supreme Court in Commissioner of Income Tax v P.J. Chemicals Limited[[1]],wherein it was held that the centralsubsidy granted should not be deducted from the actual cost of theassets for the purpose of allowance of depreciation. Followingthe same, the question is answered in the affirmative against theRevenue and in favour of the assessee. The Referred Case shall stand disposed of accordinglywithout any order as to costs. _______________ (V.V.S.RAO, J) 02.01.2012KH [1](1994) 210 ITR 830 (SC) _____________________ (B.N.RAO NALLA, J)