1995 (11) TMI 14

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....DDI J.--The Commissioner of Income-tax, Andhra Pradesh-I, Hyderabad, seeks reference of the following questions for the opinion of this court in these two income-tax cases filed under section 256(2) of the Income-tax Act, 1961 : Income-tax Case No. 108 of 1991 : "(1) Whether, on the facts and in the circumstances of the case, the Appellate Tribunal is correct in law in holding that the cash ....

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....ibunal is correct in law in holding that the cash subsidy granted by the Government of Andhra Pradesh to producers for production of films in Andhra Pradesh is not related to or meant as an adjustment against or for defraying the cost of production of such films ? (2) Whether, on the facts and in the circumstances of the case, the Tribunal is justified in law in deleting the amount of Rs. 2 lak....

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....his court in CIT v. Sahney Steel and Press Works Ltd. [1985] 152 ITR 39 was distinguished on the ground that the subsidy in that case related to the amount paid after the plant had started production. But if the State gives a subsidy to set up a new plant, it was held to be not a trading receipt. It was observed that the subsidy granted was in the nature of inducement to producers to produce featu....