2013 (1) TMI 39

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.... of the Appeals may be stated as under: Respondent (in short, 'the assessee') is carrying on business in manufacturing sugar, ethanol, rectified spirit and co-generation of power and sales. For the assessment years 2001-02 and 2006-07, the assessee filed return of income on 30.10.2001 and on 5.11.2005, respectively. The assessee deducted total loss of Rs. 17,18,36,722/- for the assessment year 2001-02 and also showed subsidy amount of Rs. 93,75,000/- received from the Government of Karnataka under the head "Reserve and Surplus", The assessee declared income of Rs. 50,21,96,567/- for the assessment year 2006-07, without deducting subsidy of Rs. 1,87,50,000/- from the Government of Karnataka, from the total cost. Notices under Sections 148 ....

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....come Tax Act, 1961 with effect from 1.4.1999? (ii)  Whether the Tribunal was correct in applying the principles of the Bombay High Court decision reported in 235 ITR 780 in the case of Menezes Pnarmaco which was rendered much prior to the introduction of Explanation 10 to Section 43(1) of the Income Tax Act, 1961 ? (iii)  Whether the ITAT is correct in law in dismissing the appeal of the assessee by overlooking the fact that the first instalment of subsidy granted by the Government is not linked to supply of power to KEB Grid and hence, provisions of Explanation 10 to Section 43(1) is applicable to the case of the respondent assessee ?" 5. Learned Counsel for the Revenue submits that Explanation 10 to Section 43(1) is applicabl....