2015 (7) TMI 1026

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....peals besides one additional issue in ITA No.422 of 2007. However, the facts are being extracted from ITA No.420 of 2007. The delay in refiling the appeals is condoned. 2. ITA No.420 of 2007 has been preferred by the appellantassessee under Section 260A of the Income Tax Act, 1961 (in short, "the Act") against the order dated 27.10.2006, Annexure A.4, passed by the Income Tax Appellate Tribunal, Chandigarh Bench (in short, "the Tribunal"), for the assessment year 1995-96, proposing to raise following substantial question of law:- "Whether in the facts and circumstances of the case, the Sales Tax Subsidy received by the assessee can be considered to be a revenue receipt when the Hon'ble Supreme Court has been pleased to entertain the S....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....uppressed sales and disallowance of interest on account of interest free loans given to sister concern to the extent of ` 3,23,617/- and other miscellaneous expenses relating to advertisement, charity, donation and festival expenses. Aggrieved by the order, the assessee filed appeal before the Commissioner of Income Tax (Appeals) [CIT(A)]. Vide order dated 14.10.1998, Annexure A.3, the CIT(A) deleted the addition made by the Assessing officer holding that the Assessing Officer could not make such an addition without rejecting the books of account. The disallowance made under section 36(1) (iii) of the Act on account of interest free loans given to sister concern was also deleted. However, the action of the Assessing officer in treating the ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....n was followed by this Court in ITA No.679 of 2010, The Commissioner of Income Tax v. Siya Ram Garg HUF, decided on 14.12.2010. On the aforesaid premises, it was urged that since the Tribunal has not dealt with and recorded any finding with regard to the purpose for which the sales tax subsidy had been paid, the matter requires to be remanded to the Tribunal to decide the issue afresh keeping in view the dictum laid down by the Apex Court in Ponni Sugars and Siya Ram Garg's cases (supra). 7. On the other hand, learned counsel for the revenue supported the orders passed by the Tribunal. 8. After hearing learned counsel for the parties, we find that the Apex Court in Ponni Sugars's case (supra) had laid down as under:- "The chara....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....anded units; (ii) minimum investment for new units and expansion of existing units; (iii) increase in free sugar sale quota. The benefit of the schemes had to be utilised only for repayment of loans. The Department and the High Court had held that the receipts from the Government under the incentive schemes were in the nature of revenue." 9. The aforesaid decision was followed by this Court in Siya Ram Garg's case (supra). Accordingly, the matter is remanded to the Tribunal to pass a fresh order after hearing the parties in view of the decision of the Apex Court in Ponni Sugars's case (supra) in accordance with law. 10. As regards the second question in ITA No.422 of 2007, learned counsel for the appellant urged that the Hon'ble A....