2009 (4) TMI 516

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....the hon'ble Tribunal was right in deleting the disallowance made by the Assessing Officer of payments made by the assessee-company towards provident fund and superannuation fund relating to the assessment year 1997-98 that were claimed by the assessee in 1998-99 under section 43B of the Income-tax Act ?   (C) Whether, on the facts and in the circumstance of the case and in law, the hon'ble Tribunal was right in allowing deduction under section 43B of the Income-tax Act the unpaid customs duty and excise duty including in the closing stock ?   (D) Whether, on the facts and in the circumstance of the case and in law, the hon'ble Tribunal was right in holding that sales tax incentive is a capital receipt ? (E) Whether, on the fact....

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....on, this is purely a finding of fact and, therefore, question (A) as framed would not arise.   3. So far as question (C) is concerned, the same is answered by the judgment of the Supreme Court in the case of Berger Paints India Ltd. v. CIT [2004] 266 ITR 99 (SC). Question (C), therefore, would not arise. 4. So far as question (D) is concerned, the Tribunal relied upon the Income-tax Appellate Tribunal Mumbai Bench "J" (Special Bench) decision in the case of assessee itself in Deputy CIT v. Reliance Industries Ltd. [2005] 273 ITR (AT) 16 (Mumbai) [SB]. We may gainfully reproduce the following portion (page 50) :   "The scheme framed by the Government of Maharashtra in 1979 and formulated by its resolution dated January 5, 1980, ....

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....; 5. Thus, it can clearly be seen that a finding has been recorded that the object of the subsidy was to encourage the setting up of industries in the backward area by generating employment therein. In our opinion, in answering the issue, the test as laid down by the Supreme Court in CIT v. Ponni Sugars and Chemicals Ltd. [2008] 306 ITR 392 (SC) will have to be considered. The Supreme Court has held that the test of the character of the receipt of a subsidy in the hands of the assessee under a scheme has to be determined with respect to the purpose for which the subsidy is granted. The court further observed that in such cases, what has to be applied is the purpose test. The point of time at which the subsidy is paid is not relevant. The s....