TaxTMI 
TaxTMI 
2016 (8) TMI 743
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....was right in law in holding that there was no apparent error in the consequential order of the Assessing Officer dated 10.02.2010 (consequent to order of C.I.T. (Appeals) dated 15.01.2010), wherein he excluded capital receipts of Rs. 80,88,026/- and Rs. 3,57,05,815/- in computation of total income but did not do so in computation of book profit u/s.115JB?" 3. Having heard learned counsel for the appellant, we may record brief facts as under. 4. For the assessment year 2006-07, the assessee company had filed a return of income, in which, sales tax and other related subsidies received under Kutch area exemption scheme was initially offered to tax. During the assessment however, the assessee contended that such receipt was in the nature of ....
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....ras High Court in the case vs. Ponii Sugars & Chemicals Ltd. 260 ITR 605 (MAD). This decision was latter on affirmed by the Hon'ble Supreme Court in the case of CIT vs Ponni Sugars & Chemicals Ltd. 306 ITR 392 (SC) by holding that the character of the receipt in the hands of the assessee has to be determined with respect to the purpose for which the subsidy is given. In other words, in such cases one has to apply the purpose test. The source is immaterial and the form of subsidy is also immaterial. It is evident from the incentive scheme itself that the purpose of this scheme was to attract to large scale investment to generate new employment and for making the economic environment of Kutch district live. In view of the above judicial d....
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.... order, rejected the same, making following observations: "7. We have considered rival contentions gone through the record carefully. As far as the decision of the ITAT, Mumbai Bench in the case of Ito Vs. Suraj Jewellery (India) Ltd (supra) is concerned, in that case the issue before the Tribunal was on merit. The assessee was not satisfied with the computation under Section 115JB made by the AO. It challenged the computation before the ld.(A). The ld.CIT(A) has allowed the claim of the assessee and directed the AO not to included the alleged capital receipts in the book profits. This order of the CIT(A) was challenged by the Revenue in ITA No.8800 & 8801/Mum/2004. In ground no.3, the revenue has specifically pleased that CIT(A) has erred....