JUDGMENT V. Ratnam, C.J. 1. In this writ petition, the petitioners have prayed for the issue of an appropriate writ to quash notices proposing to rectify certain mistakes stated to have crept in into the assessment in respect of the assessment years 1989-90 and 1990-91 relating to the petitioners. The reason given for the proposed rectification, as could be gathered from annexure P-7, is that while calculating depreciation on the assets of the assessees, central subsidy amounting to Rs. 25 lakhs had not been reduced from the cost of assets and that it was proposed to reduce the same and in respect of such a proposal, the petitioners were called upon to set out their objections, if any. The petitioners have approached this court contending that there is no question of rectifying any mistake, as claimed in annexure P-7, as there is no question of reduction, while calculating depreciation, of central subsidy received by the petitioners. In support of the stand so taken, the petitioners have relied upon several decisions of the different High Courts to the effect that the subsidy granted, pursuant to the scheme promulgated by the Department of Industries, in backward areas, cannot be reduced, while computing the cost of assets, for the purposes of allowing depreciation as also development rebate. Though the Revenue attempted to maintain that the stand taken by it was in order, we are unable to accept the same. In Srinivas Industries Vs. Commissioner of Income Tax, (1991) 92 CTR 17 : (1991) 188 ITR 22. 2. I had occasion to exhaustively examine this question and, after considering the view taken by the several courts, it was held that, having regard to the provisions in the subsidy scheme, the relevant provisions of the Income Tax Act and also the several decisions, referred to on this question, the actual cost of the assets cannot be reduced by the amount of subsidy received and Section 43(1) of the Income Tax Act, 1961, would be inapplicable. The principle of that decision would govern this petition as well and there is no dispute regarding this. In view of this, the writ petition is allowed and the rule nisi is made absolute quashing annexures P-4 and P-7. There will be no order as to costs.