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TMI Blog1983 (6) TMI 46X X X X Extracts X X X X X X X X Extracts X X X X ..... before the CIT (A). The assessee firm had furnished before the ITO a statement showing the nature of the expenses. The ITO found that most of the travelling expenses had been incurred for going to Delhi and they included amounts spent by partners also. On the basis of the disallowance made for the earlier year, the ITO disallowed Rs. 1000. For the same reason, the ld. CIT (A) confirmed the disallowance. 3. Before us also the details of the travelling expenses were placed on behalf of the assessee. After going through the same and having regard to the disallowance for the previous year, we see no justification for any interference. 4. The next ground relates to the disallowance out of advertisement expenses. The assessee claimed Rs. 5,7 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... profit and loss account. The ITO was of the view that normally where subsidies or grants were given by the Government to assist a trader in his business they were generally speaking, payments of a revenue nature and were supplementary trade receipts. He, therefore, added the amount of the subsidy in question to the assessee's income. In appeal, the ld. CIT (A) was of the view that this amount should have been deducted from the value of the generator purchased for depreciation purposes and that it could not be considered to be an item of income. Accordingly he directed the ITO to allow depreciation on the generator after deducting this amount. However, he deleted the addition of Rs. 7742 as income. 8. Before us, Shri A.N. Mehrotra, the ld. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the assessee directly or indirectly and, therefore, the subsidy amount would not go to reduce the cost of the asset for the purpose of allowing depreciation, etc. In that decision the Appellate Tribunal had examined the decision of the Hon'ble Supreme Court in the case of Challapalli Sugars Ltd. Accordingly, we are of the view that the direction issued by the CIT (A) requires to be modified. Instead of the direction given by the CIT (A), the ITO is directed to examine whether the subsidy received from the Government (U.P. Financial Corporation, Kanpur) had a relation direct or indirect to meet a portion of the actual cost schematically and factually. If the answer be in the negative, while calculating the depreciation on the generator, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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