Subsidy and depreciation

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juyalneha (Querist)
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18 February 2014 my question is follows

suppose "A" purchased plant and machinery- year-1 for 400lakh and dep is charged on the same amount.
later, suppose in year-3 subsidy from govt of Rs 150lac is received.
in books, A reduces amt of subsidy from block of asset and charged dep on it. also he adjusted the dep of earlier year.

now question is whether subsidy should be charged to tax as receipt or accrual basis i.e it should be reduced in year 1 or year 3.

secondly whether excess dep can be called escaped income. can assessment is possible u/s 263 or 148.

pls explain

juyalneha

juyalneha (Querist)
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19 February 2014 plz answer me.........as soon as possible