COMMISSIONER OF INCOME TAX, HYD. vs M/S. P.J. CHEMICALS LTD.

The Supreme Court addressed the issue of whether subsidies granted to industries can be deducted from the 'actual cost' under Section 43(1) of the Income Tax Act, 1961 for depreciation calculations. The Court held that such subsidies are not deductible, affirming the view taken by several High Courts and reversing the contrary decision of the Income Tax Appellate Tribunal. The judgment clarified the interpretation of 'actual cost' in the context of subsidies, establishing a consistent legal principle across jurisdictions.