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For the purposes of capital allowances and charges, expenditure is not regarded as having been incurred by any person (P), in so far as it has been, or is to be, met directly or indirectly by the Crown, or by any government or public or local authority (ie a 'public body'), whether in the UK or elsewhere, or by any person other than P¹.

In Cyril Lord Carpets Ltd², a company which carried on the business of textile manufacturing and warehousing bought plant and machinery and received grants under the Capital Grants to Industry (Northern Ireland) Act 1954 in respect of that expenditure and expenditure on industrial buildings. On appeal before the Special Commissioners, it was contended for the company that in computing the amount of its capital allowances, no deduction³ from the expenditure should be made in respect of the grants, as none of the expenditure had been 'met' by the grants. The company contended that payment of the grants was discretionary, and payment was made after the company had discharged by payment