2014 (12) TMI 933

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....n questions of law arise for adjudication. The assessee challenges order dated 02.08.2013 passed by the Income Tax Appellate Tribunal, Chandigarh Bench, `A' Chandigarh (for short "the Tribunal") and orders passed by the CIT (Appeals) and the Assessing Officer by raising the following substantial question of law:- "Whether on the facts and in the circumstances of the case, the Tribunal erred in law in not holding that incentives/subsidies in the form of exemption from sales tax received by the appellant constituted capital receipt not liable to tax under the provisions of the Act?" Counsel for the assessee states that though in 286 ITR 1 (P&H) Commissioner of Income Tax Versus Abhishek Industries Limited, sales tax subsidy has b....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ubsidy. The question that requires an answer is, whether the subsidy is a revenue or a capital receipt? The Tribunal has affirmed orders passed by the CIT (Appeals) and the Assessing Officer holding that the sales tax subsidy received by the assessee is a revenue receipt by primarily relying upon a judgment of this Court in Abhishek Industries Limited's case (supra). It is true that in Abhishek Industries Limited's case (supra) a Division Bench of this Court has held that sales tax subsidy is a revenue receipt but a perusal of the judgment in Ponni Sugars and Chemicals Limited's case (supra), reveals that the Supreme Court has held that whether a subsidy is a revenue or a capital receipt would depend upon the nature and purpo....