(a) Income-tax---

----Reference---Question of law---Depreciation---Actual cost---Government subsidy---Whether deductible from actual cost for calculating depreciation-- Question concluded by decision of Supreme Court---Question of law not fit for reference---Indian Income Tax Act, 1961, S.256(2).

(b) Income-tax---

----Reference---Question of fact---Addition to income whether proper or not or how much addition to be made---Is a question of fact---No question of law arises for reference---Income Tax Act, 1961, S.256.

Sandeep Bhandawat for the Commissioner.

Sanjeev Johri for the Assessee.

JUDGMENT

B. R. ARORA, J.---The Revenue; by this application moved under section 236(2) of the Income Tax Act, 1961, with respect to the assessment year 1984-85 of the assessee, has prayed that the Tribunal, Jaipur Bench, Jaipur, may be directed to state the case and refer the following two questions of law for the opinion of the High Court:

" (1) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the amount of Central Government subsidy is not deductible from the money or book cost to the assessee of its plant, machinery and building; while computing the actual cost thereof under section 43(1) of the Income Tax Act, 1961, for the purposes of allowed depreciation, etc. investment allowance, etc.?

(2) Whether, on the facts and in the circumstances of the case,- the Tribunal was justified in upholding that order of the learned Commissioner of Income-tax (Appeals) sustaining addition of rupees one lakh only out of total addition of Rs.20,53,037 representing excessive consumption of dyes and chemicals eminently justified by the Assessing Officer?"

The application under section 256(1) of the Act was dismissed by the Tribunal on the ground that so far as question No.(1) is concerned, that stands concluded by the judgment of the Rajasthan High Court in the case of CIT v. Ambica Electrolytic Capacitors (Pvt.) Ltd. (1991) 191 ITR 494 which was decided in favour of the assessee and hence this question does not enquire further reference to the High Court. So far as question No.(2) is concerned, the Tribunal opined that how much addition has to be sustained on estimated basis, is question of fact Pd requires no reference to the High Court.

The first question sought to be referred by the Revenue stands concluded by the judgment of the Supreme Court in CIT v. P. J. Chemicals Ltd.(1994) 210 ITR 830, wherein it has been held that the Government subsidy is intended as an incentive to encourage the entrepreneurs to move to backward areas and to establish the industries and the amount of subsidy is not to be deducted from the actual cost under section 43(1) of the Act for the purpose of calculation of depreciation, etc. Since the question sought to be referred already stands-decided by the judgment of the apex Court, the Tribunal was, therefore, fight in declining to refer this question to the High Court.

Now, so far as, question No.2 is concerned, the addition of Rs.20,53,037 was made by the assessing authority but the Commissioner of Income-tax (Appeals), Jodhpur, considering the nine facts mentioned in the order and the facts and the circumstances of the case came to the conclusion that in the facts and circumstances of the case it would be fair trading to make an addition of Rs.1,00,000 only and delete the balance of Rs.19,53,037 as made by the assessing authority. The Commissioner of Income-tax (Appeals) has given cogent reasons, with which the Tribunal agreed while maintaining this addition and refused to make any further addition. The findings arrived at by the Tribunal: Whether, in the facts and circumstances of the case, the addition of Rs.1,00,000 was proper or not, or how much addition is to be made, is purely a question of fact and has been decided by the Commissioner of Income-tax (Appeals) as well as by the Tribunal on the basis of the material available on record. There is nothing on record to show that the findings of fact arrived at by the Commissioner of Income-tax (Appeals) and affirmed by the Tribunal, are based on misapplication of any rule of law or are based on no evidence or the authority had ignored the material evidence. The findings are based on relevant consideration of the material and cannot be said to be perverse and these findings of fact do not raise any question of law to be referred to the High Court. No question of law, therefore, arises.

In the result,- we are of the opinion that no referable question of law arises in the matter. The application under section 256(2) of the Act, filed by the - Revenue-applicant has no merit and deserves to be dismissed. Consequently, we do not find any merit in this application and the same is hereby dismissed.

M.B.A./4114/FCOrder accordingly: