TaxTMI 
TaxTMI 
1982 (4) TMI 162
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....ter of which we shall later advert to on the apparent and ostensible ground that it is a refund of current charges paid for the period 1-2-1975 to 30-9-1975 ; along with a letter dated 7-7-1977-Rs. 1,23,300.17, along with a letter dated 30-10-1977--Rs. 1,76,872.88 = Rs. 3,00,173.05. 2. The assessee then worked out that a sum of Rs. 2,32,794 is relatable to the earlier accounting years and that the balance of Rs. 67,379 is relatable to the relevant accounting year ending 31-12-1977. It would appear that if the assessee had not been allowed any concessional rate for current consumption, the assessee will have to pay in the current accounting year a sum of Rs. 3,26,828 as current charges. The assessee had got a refund of Rs. 67,379 for the ....
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....e of Sahney Steel & Press Works Ltd. v. ITO [1982] 1 SOT 316 and argued that what was received was subsidy from the Government, capital in nature, given in the form of refund of current charges, which refund process was only a method of giving the subsidy and the concessional rate for current charges is only a formula to determine the quantum of subsidy available and that, therefore, the receipt was in pith and substance a contribution by the Government towards capital. It was also argued by the assessee that this is on a par with the subsidy covered by the Board's Circular No. 142, dated 1-8-1974, where it is laid down that Central Outright Grant of Subsidy Scheme, 1971, is capital receipt and that the scheme under which concessional rate ....
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....ustries in Tamil Nadu. SIPCOT's role is to plan, promote and develop medium and major industries and its promotional activities comprise of the following : " 1. Provision of financial assistance on liberal terms to medium and major industries, under IDBI Refinancing Scheme. 2. Implementation of a package of incentives for the benefit of entrepreneurs. 3. Development of potential growth centres and provision of developed lands at reasonable cost on easy payment terms. 4. Provision of various ancillary services for the entrepreneurs. " 5. This scheme of concessional tariff in electric current charges to industries under which the assessee got the money back, falls under item 2---Implementation of a package of incentives for the....
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....eme is primarily given for helping the growth of industries and not for supplementing their profits and that the subsidy is intended to be a contribution towards capital outlay of the industrial unit. It is to be further noted that the package deal contains six different items of subsidies each different in character and different also in the extent of its application. It is not as if the assessee is entitled at one and the same time to financial assistance and also concessional tariff. There is no case that the assessee had received other categories of incentives from this package deal. Each incentive is distinct and separate in character. The first incentive in the package deal is subsidy for project report and studies. The second incenti....
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....dustrial unit, there is no reason to think that the other incentives of concessional tariff is not for the growth of industries but for supplementing the profits. It is only reasonable to give the same interpretation to all the incentives. All these incentives have the same object. All these incentives are intended to achieve the same goal and the same object. If we accept the position that this incentive of concessional power tariff like the one specified in the circular also is primarily given for helping the growth of industries and not for supplementing their profits and that the subsidy is intended to be a contribution towards capital outlay of the industrial unit then all other subsidiary or minor items of dispute in this case resolve....
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....g to the assessee a certain amount of money, the method of process or modus operandi devised to implement the grant of this incentive No. 6 in item 2 is to allow the assessee to retain a certain amount of money with them which amount is the difference between normal and concessional tariff. Otherwise, the assessee will have to pay the normal tariff and wait to receive cash subsidy from the Government. That is a tidious process. So the concessional rate has to be understood as a measure or method to determine the quantum of subsidy. The method of concessional tariff where the assessee pays concessional rates has to be on piercing the veil to ascertain the pith and substance and the real character construed as a transaction where the assessee....