Subsidy for setting up industries to generate employment not to be adjusted against cost of depreciable assets

Sanghi Industries Ltd. Vs ACIT (ITAT Hyderabad) Only if subsidy or other grant was given to offset the cost of an asset, such payment would be covered by Explanation 10 to section 143(1). In the instant case where subsidy was received as an incentive for setting up industries to generate employment, the mere fact that specified percentage of fixed capital cost was taken as basis for determining the subsidy, it should not be mistaken as a payment intended to subsidise the cost of fixed assets. Therefore, AO was directed to not to adjust the subsidy so received out of the cost of depreciable ass...