| Case ID |
252dbd7f-a2ce-4d65-95c7-fc8a83d4b5b1 |
| Body |
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| Case Number |
Income-tax Case No. 7 of 1991 |
| Decision Date |
Nov 14, 1995 |
| Hearing Date |
|
| Decision |
The Andhra Pradesh High Court ruled that the subsidy granted by the Central Government cannot be deducted from the actual cost of the assets of the assessee under section 43(1) of the Income Tax Act, 1961. The court dismissed the application for reference, stating that the Tribunal was justified in holding that the subsidy could not be considered in computing the actual cost of capital assets. The court referenced the case of CIT v. Godavari Plywoods Ltd. (1987) 168 ITR 632, affirming that the subsidy was not intended to meet the actual costs of assets. The Revenue's argument for reconsideration was rejected, and the court found no referable questions arising from the order. |
| Summary |
The case revolves around the interpretation of the Income Tax Act, specifically concerning capital subsidies provided by the Central Government to industrial units. The central issue was whether such subsidies could be deducted from the actual cost of capital assets under section 43(1) of the Act. The Andhra Pradesh High Court upheld the Tribunal's decision that the subsidies were not deductible, referencing prior judgments and emphasizing the intent of the subsidy schemes. This case highlights significant aspects of tax law regarding subsidies and their treatment in financial statements, making it a crucial reference for similar future cases. Keywords such as 'Income Tax Act', 'capital subsidy', 'Andhra Pradesh High Court', and 'tax law' are essential for understanding the implications of this ruling. |
| Court |
Andhra Pradesh High Court
|
| Entities Involved |
Central Government,
Andhra Pradesh High Court
|
| Judges |
P. Venkatarama Reddi,
P. Ramakrishnam Raju
|
| Lawyers |
S. R. Ashok,
C. Kodandaram
|
| Petitioners |
COMMISSIONER OF INCOME TAX
|
| Respondents |
NOVAPAN INDIA LTD
|
| Citations |
1999 SLD 457,
1999 PTD 2458,
(1997) 227 ITR 710
|
| Other Citations |
CIT v. Godavari Plywoods Ltd. (1987) 168 ITR 632
|
| Laws Involved |
Income Tax Act, 1961
|
| Sections |
43,
256
|