RAMANUJAM J.


The assessee is a public limited company. For the assessment year 1971-72, it claimed deduction under section 80-I of the Income-tax Act, 1961.


"Whether, on the facts and in the circumstances of the case, Rs. 5, 079 and Rs. 12, 262 received by the assessee by way of cash subsidy and Rs. 1, 562 and Rs. 12, 643 received by the assessee by way of refund of drawback duty during the previous years ending December 31, 1970, and December 31, 1971, respectively, should be considered as profits and gains arising from the priority industry for the purpose of computing the deduction allowable under section 80-I of the Income-tax Act, 1961, for the assessment years 1971-72 and 1972-73, respectively ?" *


The view taken by the Income-tax Appellate Tribunal in ITO v. Shardlow India Limited (ITA No. 3025 of 1972-73, dated May 28, 1975) was the subject-matter of a tax case before this court and this court upheld the said order of the Income-tax Appellate Tribunal in Shardlow India Ltd. v. CIT. The decision of this court in Shardlow India's case follows an earlier decision of the Supreme Court in Cambay Electric Supply Industrial Co. Ltd. v. CIT. Hence, in view of the decision of this court in Shardlow India Ltd. v. CIT, w

hich clearly governs this case, the question of law is answered in the affirmative and against the Revenue. There will be no order as to costs.