Punjab & Harayana H.C : Whether, on the facts and in the circumstances of the case, the capital value of the work- inprogress during the accounting period relevant to the asst. yr. 1978-79 should be taken into account for inclusion in the capital computation base for computing the deduction under s. 80J of the IT Act, 1961, and r. 19A(2) of the IT Rules, 1962 ?

S. S. SODHI J. :

Both the questions referred for the opinion of this Court stand covered by our earlier decisions. The questions posed are as under :

“(1) Whether, on the facts and in the circumstances of the case, the capital value of the work- inprogress during the accounting period relevant to the asst. yr. 1978-79 should be taken into account for inclusion in the capital computation base for computing the deduction under s. 80J of the IT Act, 1961, and r. 19A(2) of the IT Rules, 1962 ?

(2) Whether, on the facts and in the circumstances of the case, the capital subsidy of Rs. 7,58,000 received by the assessee should be deducted from the value of the plant and machinery and building and sheds while working out the written down value for allowing depreciation to the assessee under s. 32 of the Act for the accounting period relevant to the asst. yr. 1978-79 ?”

2. The matter regarding the capital value of work-in-progress stands settled by our judgment in IT Ref. No. 145 of 1982 (CIT vs. Gopi Chand Textile Mills Ltd. (1990) 82 CTR (P&H)309 : (1989) 179 ITR 371(P&H)), decided on February 27, 1989, and in terms thereof, this question is answered in the affirmative, in favour of the assessee and against the Revenue.

Turning now to the next question raised, which is with regard to capital subsidy, it has been held by us in our earlier decision in IT Ref. No. 22 of 1986 (CIT vs. Jindal Brothers Rice Mills (1989) 79 CTR (P&H) 235 : (1989) 179 ITR 470(P&H)), decided on March 14, 1989, that the amount of subsidy received by the assessee has to be deducted from the value of the assets while working out its written down value for purposes of depreciation. In terms thereof, this question is answered in the affirmative, in favour of the Revenue and against the assessee.

This reference is disposed of accordingly. There will, however, be no order as to costs.

[Citation : 179 ITR 536]