TaxTMI 
TaxTMI 
2008 (8) TMI 351
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....T. A. No.1048/Delhi/2002 partly. 2. Heard learned counsel for the parties. 3. Questions of law involved in this appeal are as under: "(i) Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal has erred in law in holding that permitting the assessee to sell higher percentage of levy free sugar is not in the nature of revenue receipt ? (ii) Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal has erred in law in upholding the order of the Commissioner of Income-tax (Appeals) that production incentive bonus was deductible expenditure for computing the taxable income?" 4. "Brief facts ....
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.... production incentive bonus and addition relating to excess realization of incentive. Hence, this appeal by the Revenue. 5. Answer to question of law No.(1) Learned counsel for the appellant Revenue drew attention of this court to the case & of Sahney Steel and Press Works Ltd. v. CIT [1997] 228 ITR 253 (SC), wherein, following the view taken by the Division Bench of the Calcutta High Court in the case of Kesoram Industries and Cotton Mills Ltd. v. CIT [1991] 191 ITR 518 (Cal), it is held that the subsidy given by the Government to the assessee for carrying on business cannot be said to be capital outlay of the industry and it can only be recorded as revenue receipt. In the said case, the amount of incentive given by the Government of An....
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....ugh it is clearly in the nature of revenue receipt. In the light of the Supreme Court's decision in the case of Sahney Steel's case [1997] 228 1TR 253 (SC) wherein it has been held that any subsidy received to assist the running business will be in the nature of operational subsidy and is liable to tax, I hold that it is revenue receipt. In the assessee's own case in the last year's case also receipt has been treated as revenue receipt and it is also observed that the additions made by the Assessing Officer in many other cases such as Dhampur Sugar Mills (assessment year 1995-96) have been confirmed by the Commissioner of Income-tax (Appeals), Bareilly. Hence, the amount of Rs. 1,96,84,098 is added towards income of the assessee." 8. The....
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.... I have carefully considered the facts and decision submitted on the point and have perused the appellate order of the learned Commissioner of Income-tax (Appeals), Bareilly for the assessment year 1994-95. I agree with the learned counsel and the incentive on sale of additional release of free sugar under Sampath Incentive Scheme is held to be in nature of capital receipt. The Assessing Officer is directed to treat it as a capital receipt." 9. The Income-tax Appellate Tribunal has affirmed the view taken by the Commissioner of Income-tax (Appeals) on the ground that the Tribunal, for the assessment year 1996-97, has taken the same view in its order dated March 3, 2005, in I. T. A. No. 1915/DelhiI2003. We have considered the case law, me....