Law:

Section:

Section 37(1) of the Income-tax Act, 1961 - Business expenditure - Allowability of - Assessment years 1976-77 and 1978-79 - Whether contribution made to State Co-operative Federal Education Fund, as per provisions of section 69 of the Gujarat Rajya Co-operative Society Act, 1961, was allowable as business expenditure - Held, yes Section 32, read with section 43(1), of the Income-tax Act, 1961 - Depreciation - Allowance/rate of - Assessment years 1976-77 and 1978-79 - Assessee received 30 per cent value of plant and machinery as grant from Indian Dairy Corporation - Whether since subsidy of that nature did not partake of incidents which attract conditions for their deductibility from actual cost, assessee would be entitled for depreciation on that amount - Held, yes CASES REFERRED TO Mehsana District Co-operative Milk Producers' Union Ltd. v. CIT [1993] 203 ITR 601 (Guj.) [Para 2], CIT v. South Arcot District Co-operative Supply & Marketing Society Ltd. [1981] 127 ITR 467 (Mad.) [Para 2], CIT v. Kaira District Co-operative Milk Producers' Union Ltd. [1994] 209 ITR 898 (Guj.) [Para 4], CIT v. P.J. Chemicals Ltd. [1994] 210 ITR 830 / 76 Taxman 611 (SC) [Para 6] andBanaskantha District Co-operative Milk Producers' Union Ltd. v. CIT [1994] 210 ITR 962/[1995] 80 Taxman 420 (Guj.) [Para 7]. J.P. Shah for the Applicant. Manish R. Bhatt for the Respondent. JUDGMENT 1. At the instance of the assessee, the present reference is made before this Court wherein following questions have been referred : "1. Whether, on the facts and circumstances of the case, the Tribunal was right in law in holding that the contribution paid as per the provisions of section 69 of the Gujarat Rajya Co-operative Societies Act, 1961, is not deductible in computation of total income ? 2. Whether on the facts and circumstances of the case, the Tribunal was right in law in holding that depreciation was not admissible on 30 per cent value of the plant and machinery received from Indian Dairy Corporation? 3. Whether, on the facts, the Tribunal was right in law in holding that 30 per cent of value of the plant and machinery received from Indian Dairy Corporation was not to be included in…

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