TMI Blog1989 (3) TMI 76X X X X Extracts X X X X X X X X Extracts X X X X ..... by K. S. PARIPOORNAN J. -At the instance of the Revenue, the Income-tax Appellate Tribunal (in short "the Tribunal") has referred the following two questions of law for the decision of this court : "1. Whether, on the facts and in the circumstances of the case and on an interpretation of section 43(1) of the Income-tax Act, the subsidy received should be deducted from the cost of assets for p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct. The assessee was getting subsidy from the Government, The plea of the assessee was that depreciation and relief under section 80J of the Act should be afforded ignoring the subsidy received from the Government. The Income-tax Officer took the view that the subsidy received from the Government should be reduced from the value of the assets for computation of depreciation and relief under sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s also counsel for the respondent assessee Mr. Abdul Hassan. The Tribunal has referred to the nature of subsidy received by the assessee in paragraph 7 of the appellate order. It is stated that the subsidy was given in this case for industries situated in backward areas. The said subsidy is similar to the subsidy granted by the State Industries Promotion Corporation, which was construed by the Spe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the following decisions: Lucknow Producers' Co-operative Milk Union Ltd. v. CIT [1983] 143 ITR 60 (All), CIT v. Godavari Plywoods Ltd. [1987] 168 ITR 632 (AP), CIT v. Bhandari Capacitors Private Ltd. [1987] 168 ITR 647, (MP), CIT v. Diamond Dies Manufacturing Corporation P. Ltd. [1988] 172 ITR 655 (Kar), CIT v. Premier Extraction (P.) Ltd. [1989] 175 ITR 22 (MP) and CIT v. Dewas Chemical and Fe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enefit of section 80HH of the Act. In the light of the Bench decision of this court in Marwell Sea Foods' case [1987] 166 ITR 624, we hold that the assessee's business involves production and that the assessee is entitled to exemption under section 80HH of the Income-tax Act. Our answer to question No. 2 referred to us is in the affirmative, in favour of the assessee and against the Revenue. A ..... X X X X Extracts X X X X X X X X Extracts X X X X
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