TaxTMI 
TaxTMI 
2024 (3) TMI 485
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....ory notices under section 143(2) as well as section 142(1) were issued and served on the assessee. The Assessing Officer ("AO") vide order dated 25/01/2017 passed under section 143(3) read with section 144C(3) of the Act assessed the total income of the assessee at Rs. 1351,78,51,596, under normal provisions of the Act, after making certain additions/disallowances. The learned CIT(A), vide impugned order, granted partial relief to the assessee. Being aggrieved, both the assessee as well as the Revenue are in appeal before us. ITA No.268/Mum./2018 Assessee's Appeal - A.Y. 2013-14 3. In its appeal, the assessee has raised the following grounds:- 1) The learned Commissioner of Income Tax (Appeals) -55, Mumbai erred in applying Rule 8D and disallowed a sum of Rs. 69.44 lacs (net of Rs. 23.87 lacs offered by assessee) u/s 14A of the Income Tax Act, 1961. 2) The learned Commissioner of Income Tax (Appeals) -55, Mumbai disallowed Rs. 26.79 lacs on account of Transfer pricing adjustments for low mark up on support service provided to associated enterprises. 3) The learned Commissioner of Income Tax (Appeals) -55. Mumbai erred in disallowing Rs. 5.98 lacs on account of Transfer Pric....
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....rded by the AO. 7. On the other hand, the learned Departmental Representative ("learned DR") vehemently relied upon the order passed by the AO. 8. We have considered the submissions of both sides and perused the material available on record. Undisputedly, in the present case, the assessee earned a dividend income of Rs. 31,69,67,788 from domestic companies/mutual funds and also on interest on tax-free REC bonds amounting to Rs. 2,16,86,381, which has been claimed as exempt under section 10 of the Act. Further, there is also no dispute regarding the fact that the assessee while computing its taxable income suo-moto disallowed an amount of Rs. 23,86,531 as an expenditure incurred for earning the aforesaid exempt income. As per the assessee, the aforesaid suo-moto disallowance is based on the report obtained from the accountant, who after verifying assessee's books of accounts and relevant records has estimated the amount of disallowance. The working of aforesaid suo-moto disallowance made by the assessee, forms part of the paper book on page 329, as under: Sr. No. Particulars Rupees 1. Interest on borrowed funds directly attributable to income which does not form part of to....
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....de by the assessee. 10. Before proceeding further, it is pertinent to note certain relevant provisions of the Act, which are necessary for adjudication of the issue at hand. Section 10 of the Act deals with income which does not form part of the total income of the assessee. Section 14A of the Act provides that no deduction shall be allowed in respect of expenditure incurred by the assessee in relation to income which does not form part of the total income under this Act. Further, section 14A(2) of the Act, reads as under: "(2) The Assessing Officer shall determine the amount of expenditure incurred in relation to such income which does not form part of total income under this Act in accordance with such method as may be prescribed, if the Assessing Officer, having regard to the accounts of the assessee, is not satisfied with the correctness of the claim of the assessee in respect of such expenditure in relation to income which does in form part of the total income under this Act". (emphasis supplied) 11. Thus, if the AO is not satisfied with the correctness of the claim of the assessee in respect of expenditure incurred in relation to income which does not form part of the....
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....g with the submission of the assessee and requires that the AO should also provide the basis for reaching such a conclusion, after having regard to the accounts of the assessee. However, as noted above, in the present case the AO merely proceeded to compute the disallowance under section 14A read with Rule 8D without examining the correctness of the claim of the assessee regarding expenditure incurred for earning the exempt income. It is evident from the record that the assessee's own funds, i.e. share capital and reserves & surplus, are Rs. 2487.78 crore, while investment in tax-free securities is only limited to Rs. 165.07 crore and therefore it can be presumed that the assessee had sufficient own funds for making the aforesaid investment in tax-free securities. Further, it is also evident from the record that the assessee has computed the suo-moto disallowance on the basis of the salary cost of the designated employees, however, there is no material available on record to show that the AO has recorded the requisite satisfaction to the effect that the computation made by the assessee is incorrect having regard to the accounts of the assessee. 13. We find that the Hon'ble ju....
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....est judgment determination, as earlier prevailing, would become applicable." Thus, Rule 8D of the Rules cannot be invoked where the suo moto disallowance made by the respondent assessee is not found to be satisfactory by the Assessing Officer having regard to the accounts of the assessee. In the absence of recording the aforesaid fact of non- satisfaction in terms of Section 14A(2) of the Act, invocation of Rule 8D is not permissible. (e) Therefore, in view of the above decision of the Apex Court, this question also does not give rise to any substantial question of law. Thus, not entertained." 14. Since, in the present case, no proper satisfaction has been recorded by the AO in terms of the provisions of section 14A(2) of the Act, having regard to the accounts of the assessee, about the correctness of the claim of the assessee in respect of expenditure incurred in relation to exempt income, respectfully following the aforesaid decisions, we do not find any reason for upholding the disallowance made by the AO under section 14A read with Rule 8D of the Rules. Accordingly, the same is directed to be deleted. As a result, ground no.1 raised in assessee's appeal is allowed." 10. ....
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....tragroup services is at arm's length price ("ALP"). 13. The AO made reference to the Transfer Pricing Officer ("TPO") for the determination of ALP of the aforesaid international transaction. The TPO vide order dated 21/10/2016 passed under section 92CA(3) of the Act rejected two companies selected as comparables by the assessee and included two other companies i.e. Axis Intergrated Systems Ltd. and Inmacs Management Services Ltd. as comparables to the assessee. Accordingly, by considering the following five companies as comparables to the assessee, the TPO arrived at average OP/OC of 22.82%:- Sr. No. Name of the Company Margin (OP/OC) 1. Axis Integrated Systems Ltd. 36.30% 2. Inmacs Management Services Ltd. 41.11% 3. H G S Business Services Pvt. Ltd. 15.33% 4. I C R A Management Consulting Ltd. 2.11% 5. Konmineni Infotech Ltd. 19.23% Average 22.82% 14. By applying the arm's length margin of 22.82% as computed above, the TPO, inter-alia, proposed an upward adjustment of Rs. 26,79,717 with respect to international transaction of provision of support services and intragroup services. In conformity, the AO, inter-alia, passed the order under s....
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.... pertaining to additional disclosure, we find that the company has traded in Digital Certificate and quantitative details of the trade have been mentioned therein. Accordingly, in view of the information as provided in the annual report of this company, we agree with the submissions of the assessee that the nature of activities undertaken by this company is ambiguous and in any case cannot be said to be similar to the business support services rendered by the assessee, during the year under consideration, to its associated enterprises. Further, there is no material available on record to show that this company is engaged in the activities noted by the TPO in para-5.3 of its order. In view of our aforesaid findings, we are of the considered view that Axis Integrated Systems Ltd. is not comparable to the assessee, and accordingly, we direct the exclusion of this company for benchmarking the international transaction of provision of support services and intragroup services. ii) Inmacs Management Services Ltd. 18. The next comparable under dispute is Inmacs Management Services Ltd. This company was included as comparable by the TPO vide order passed under section 92CA(3) of the Act o....
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....rused the material available on record. The brief facts of the case pertaining to this issue are that during the transfer pricing assessment proceedings, the TPO noted that apart from the international transactions reported by the assessee in Form No.3CEB, the assessee has issued non-contractual letters of comfort/support to banks on behalf of some of its subsidiaries from time to time and has not charged anything from its associated enterprises. It was observed that the associated enterprises have availed loans amounting to Rs. 149.56 crore (approx.) based on the letters of comfort issued by the assessee. We find that during the transfer pricing assessment proceedings, the assessee made similar submissions as were made in the preceding assessment year. However, the TPO vide order dated 21/10/2016 passed under section 92CA(3) of the Act did not agree with the submissions of the assessee and held that the letter of comfort is to be regarded as an international transaction, as an intergroup service has been rendered by the assessee to its associated enterprise. Considering the similarity in the facts and circumstances of the case vis-a-vis the issuance of corporate guarantee, the arm....
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....d by the associated enterprises from the banks outside India, are reproduced as under, for ready reference:- (i) "Re. Facilities extended by Citibank N.A to Asian Paints (Bangladesh) Limited We confirm that we are aware of the facilities amounting to Bangladesh Taka 38 Million extended by Citibank N.A to our subsidiary. Asian Paints (Bangladesh) Limited (herein referred to as "the Company") in addition to the facilities worth Bangladesh Taka 386 Million already extended by Citibank to this Company. The aforesaid company is viewed as a strategic investment for us in Bangladesh and we will continue to lend management and technical support to this company and will be fully supportive of its operations. We, Asian Paints Limited confirm that it is our intention to maintain our majority ownership and management control of this company during the currency of the facilities and that we as and when they fall due. We will also not do anything or take any steps so as to permit the company to enter into liquidation (whether compulsory or voluntary) or any arrangement with its creditors in a manner as to prejudice your rights against the company in respect of the said facilities. We u....
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....d letters of comfort issued by the assessee to the banks on behalf of some of its associated enterprises constitute an international transaction within the meaning of the Act. And if so, then it is to be decided as to what would be the ALP of the said international transaction. The term "international transaction" has been defined in section 92B of the Act as under:- "(1) For the purposes of this section and sections 92, 92C, 92D and 92E, "international transaction" means a transaction between two or more associated enterprises, either or both of whom are non-residents, in the nature of purchase, sale or lease of tangible or intangible property, or provision of services, or lending or borrowing money, or any other transaction having a bearing on the profits, income, losses or assets of such enterprises, and shall include a mutual agreement or arrangement between two or more associated enterprises for the allocation or apportionment of, or any contribution to, any cost or expense incurred or to be incurred in connection with a benefit, service or facility provided or to be provided to any one or more of such enterprises." 27. From a plain reading of the aforesaid provision, it i....
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.... issued by the assessee have already been accepted to be an international transaction by the assessee in the present case. Such being the facts of the present case, we are of the considered view that the letters of comfort issued by the assessee in respect of the credit facility extended to its subsidiaries by the banks outside India, which has been admitted to be a liability by the assessee and thus have a bearing on the assets, constitutes an international transaction within the meaning of section 92B of the Act. Further, in view of the aforesaid declaration, we find no merits in the submission of the assessee that it is not financially obligated to bear the cost of repayment of loans to the banks in case subsidiaries default in repayment, as the assessee itself has treated the credit facility extended to its subsidiaries pursuant to the letters of comfort as its contingent liability. During the hearing, no material was brought on record to controvert the disclosure made by the assessee in its financial statement. Further, from the document of the credit facility extended to Berger International Ltd, Singapore, forming part of the paper book from pages 4-6, we find that the credi....
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....ever, in the present case, it is pertinent to note that the assessee, vide letters of comfort, not only undertook to use its best endeavour to see that the obligations of the subsidiary are met as and when they fall due but also treated the liability as a contingent liability in its financial statement. Therefore, we are of the considered view that the facts of the present case, as noted above, are different from the facts that were under consideration before the coordinate bench in the preceding years, and thus, the findings of the coordinate bench are not applicable to the present case. 32. As regards the ALP of the letters of comfort, the TPO considered 0.50% as the arm's length rate (being 50% of 1% fee for guarantee commission). While the learned CIT(A) reduced the arm's length corporate guarantee commission to 0.20%, and the arm's length rate for letters of comfort was also reduced to 0.04% (being 20% of 0.20%). During the hearing, the learned AR without prejudice to the main submission that the letters of comfort issued by the assessee are not an international transaction submitted that the corporate guarantee issued by the assessee cannot be compared with the letters of c....
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.... the Ld. CIT(A) erred in directing the A. O to verify the allowability of expenditure incurred u/s 35(2AB) without appreciating the fact that the expenditure was disallowed by DSIR (as per Certificate in Form No. 3CL) as the same was not incurred for R & D purpose." 3. "On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in restricting the disallowance @ 0.50% of damaged stock, in the closing stock of finished goods without appreciating the facts of the case." 4. "On the facts and in the circumstances of the case and in law, the Id. CIT (A) erred in restricting the disallowance u/s 14A r.w. Rule 8D to Rs. 93,30,985/-, without appreciating the facts of the case. 5. "On the facts and in the circumstances of the case and in law, the Id. CIT (A) erred in allowing Rs. 96,29,369/- on account of balance 10% additional depreciation on additions made in A. Y. 2012-13, without appreciating the facts of the case." 6. "On the facts and in the circumstances of the case and in law, the Id. CIT(A) erred in allowing Rs. 83,53,74,860/-on account of expenditure incurred on PC Club Trip & other Trip Schemes without appreciating the fact that the trip expenditure....
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.... received from DSIR obtained in Form No.3CM during the assessment proceedings. The assessee also furnished a copy of the certificate of expenditure in Form No.3CL received from the DSIR. The assessee also provided a copy of the reconciliation between the amounts claimed in the return of income vis-a-vis the claim allowed by the DSIR. During the assessment proceedings, the assessee was also asked to show cause why the differential amount as per Form No.3CL be not disallowed, which was not allowed by the DSIR. In response thereto, the assessee submitted that except for the expenditure in the nature of land and building, all other expenditures incurred on scientific research will be eligible for the weighted deduction under section 35(2AB) of the Act. The assessee further submitted that all the expenditure incurred by it is eligible for weighted deduction since they are incurred in the approved R&D facility. 32. The AO vide order passed under section 143(3) read with section 144C(3) of the Act did not agree with the submissions of the assessee and restricted the weighted deduction on R&D expenditure under section 35(2AB) of the Act on the basis of the certificate issued by the DSIR i....
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....thus was entirely different and even the facts involved in the said case were different from the facts of the assessee's case in as much as the entire expenditure incurred by the assessee in that case on R & D was duly certified by the prescribed authority whereas in the case of the assessee, the same is not certified to be eligible R & D expenditure to the extent of Rs. 54.34 lakhs. 14. The le Counsel for the assessee has also relied on the decision of the Ahmedabad bench of ITAT in the case of ACIT vs Torrent Pharmaceuticals Ltd. in ITA No.3569/Ahd/2004 dated 13.11.2009 in support of the assessee's case on the issue under consideration. In the said case, weighted deduction claimed by the assessee u/s 35(2AB) on account of R & D expenditure was partly disallowed by the AO relying on the figure contained in the certificate issued by DSIR and the same was held to be unsustainable by the Tribunal holding that There was no justification in harping upon the figure contained in the certificate issued by DSIR as was done by the Assessing Officer. It was held by the Tribunai that the relevant provisions of the Act did not contain any specific condition that the deduction u/s 35(....
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....inert stock was depreciated by the assessee. Accordingly, the assessee was asked to show cause why the value of damaged stock be not added to closing stock. In response thereto, the assessee submitted that while loading and unloading, many a time, the tins containing paints get damaged. The level of damage for each tin varies from others. It was submitted that hence it is very difficult to ascertain the value of such damaged tin while valuing the closing stock at the year end. Therefore, damaged stocks are segregated and are stored in a separate storage location and the value of such material is considered as Nil while valuing the closing stock. It was further submitted that as and when such goods are disposed of, the consideration is accounted for under the head Sales. The AO vide assessment order held that the assessee has admitted that damaged stock is not entirely in non-saleable condition and sale is recorded, whenever such sale takes place. The AO further held that this method of writing off a part of the stock at the end of the year and then booking the sales in subsequent years gives a distorted picture of the real profits of the business of the assessee, which is not accep....
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.... in the findings of the learned CIT(A) on this issue. Accordingly, ground no.3 raised in Revenue's appeal is dismissed. 41. The issue arising in ground no.4, raised in Revenue's appeal, pertains to disallowance under section 14A of the Act. In view of our findings rendered in assessee's appeal on a similar issue, ground no.4 raised in Revenue's appeal is dismissed. 42. The issue arising in ground no.5, raised in Revenue's appeal, pertains to the allowance of balance additional depreciation. 43. The brief facts of the case pertaining to this issue, as emanating from the record, are: During the assessment proceedings, it was observed that the assessee has claimed additional depreciation @10% on assets acquired during the financial year 2011-12 amounting to Rs. 96,29,369 under section 32(1)(iia) of the Act. Accordingly, the assessee was asked to explain the allowability of additional depreciation so claimed. In response thereto, the assessee submitted that as per section 32(1)(iia) of the Act, the assessee is entitled to claim 20% additional depreciation on any new plant and machinery acquired after 31/03/2005. It was further submitted that as per the provision to section 32(ii)(b)....
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....eciation in financial year 2008-2009 (assessment year 2009-10) and therefore it claimed that balance 10% of the depreciation should be allowed to the assessee in financial year 2010-11. 036. The learned assessing officer rejected the claim of the assessee holding that there is no such provision to claim balance 10% additional depreciation in subsequent years for addition made in earlier year. In past year learned CIT -A who allowed the claim of the assessee following the decision of coordinate bench in Cosmo films Ltd 24 taxmann 189 and SIL Ltd 26 taxmann 78, The learned assessing officer did not followed order of the learned CIT - A in earlier year also and made disallowance of Rs 1,51,65,251/-. 037. On appeal before the learned CIT -A, he allowed the claim of the assessee based on his own decision for assessment year 2008- 2009 in case of the assessee. We find that the identical issue has been decided in favour of the assessee in the assessee's own case for assessment year 2009-10 in ITA number 2754/M/2014 and ITA number 4203/M/2014 by coordinate bench as Under:- "38. In ground No. 5, revenue has challenged the decision of learned Commissioner (Appeals) in allowing asse....
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.... is also a fact on record, against similar claim allowed by learned Commissioner Appeals) in assessee's own case in Assessment Year 2008- 29, the revenue has not preferred any appeal before the bunal. In view of the above, we uphold the decision of Jeaned Commissioner (Appeals) on the issue. Ground raised is dismissed. 038. Therefore, respectfully following the decision of the coordinate bench in assessee's own case for assessment year 2009-10, ground number 6 of the appeal is dismissed holding that the learned CIT appeal is correct in allowing additional depreciation at the rate of 10% for asset purchased in the earlier year amounting to Rs. 151,65,251/- 36. Since the issue is exactly similar and grounds as well as the facts are also identical, respectfully following the above decision in assessee's own case for the A.Y. 2010-11 and also following the principle of "Rule of consistency" we dismiss the ground raised by the revenue holding that Ld.CIT(A) is correct in allowing the additional depreciation at the rate of 10% for asset purchased in the earlier year. Ground raised by the revenue is dismissed." 46. We find that similar findings were rendered by the coordi....
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....sed the material available on record. We find that while deciding a similar issue in favour of the assessee the coordinate bench of the Tribunal in assessee's own case in ACIT v/s Asian Paints Ltd., in ITA No. 4675/Mum/2015, for the assessment year 2010-11, vide order dated 23/02/2022, observed as under:- "041. It is also stated before us that the issue squarely covered in favour of the assessee for assessment year 2009 10 in ITA number 2754/M/2014 and ITA number 4203/M/2014 wherein the coordinate bench held as Under: - "43. In ground 6, the revenue has challenged deletion of disallowance of 1,610.45 lakhs on account of expenditure incurred on trip scheme. 44. Briefly the facts are, during the assessment proceedings, the Assessing Officer noticed that the assessee had debited an of amount 16,10,45,094/- towards expenditure incurred on account of trip scheme. Noticing this, he called upon the assessee to justify the claim. After verifying the details furnished by the assessee, the Assessing Officer observed that the amount was paid to SOTC for foreign trip of its dealers. Being of the view that the expenditure incurred was not for the purpose of assessee's business, he hel....
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....m of purchases made by the dealer. Finally, he submitted, the assessee is claiming such deduction for past 20 years. Except the impugned assessment year, the expenditure has never been disallowed. Therefore, there is no reason to deviate in the impugned assessment year. 48. We have considered rival submissions and perused materials on record. As could be seen from the facts on record, to expand its business the assessee has devised a trip scheme wherein it organized foreign trips to its dealers and distributors based on achieving a specific target assigned by the assessee. On achieving such target, the dealer/distributor is entitled to undertake the trip organized by the assessee through SOTC. Thus, from the aforesaid facts it is very much clear that the entire trip scheme is for the purpose of expanding assessee's business by encouraging the dealers and distributors to achieve a specific target of purchase. Thus, the scheme is closely linked to assessee's business activity. It is also a fact that the assessee has not paid any amount to the dealers and distributors, but amount spent has been paid to SOTC for organizing the trip. It is also a fact on record that the amount....
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....eration, the assessee partly waived the Royalty income receivable from two of its subsidiary companies situated in Bangladesh and Sri Lanka. During the assessment proceedings, the assessee submitted that it had an agreement with its indirect overseas subsidiaries in Bangladesh and Sri Lanka, according to which the assessee has to receive a Royalty of 3% of net sales of other units. However considering the financial position of the subsidiaries, the assessee agreed to waive part of the Royalty and therefore during the year has credited 1% of the Royalty amount to the Profit and Loss account instead of 3% as per the agreement. The assessee further submitted that under the Act as well as the Double Taxation Avoidance Agreement ("DTAA") entered with the aforesaid countries, the assessee is liable to pay tax only on the amount of Royalty received by it. The AO vide assessment order did not agree with the submissions of the assessee and by following the approach adopted in the assessment years 2011-12 and 2012-13 proceeded to make the addition of the balance Royalty, i.e. 2%, which was waived by the assessee. 54. The learned CIT(A), vide impugned order, held that a similar waiver was gr....
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....d international transaction. However, the AO, by placing reliance upon the findings of its predecessor in assessee's own case for the assessment year 2011-12, held that the legitimate right to receive corresponding income (Royalty) cannot be waived off through an arbitrary decision, particularly till such time as the original written and duly signed agreement is in place. Accordingly, the AO made the addition of the balance of 2% royalty waived off by the assessee as the income receivable in the hands of the assessee. Even though no adjustment was made by the TPO on account of the transaction of receipt of Royalty from the subsidiary companies in Bangladesh and Sri Lanka. 65. Before proceeding further, it is pertinent to note that as per section 5(1) of the Act in the case of a resident, the total income, inter-alia, includes all income from whatever sources derived which accrues or arises to him outside India during the year. As per the assessee, it is entitled to receive the Royalty from its overseas subsidiaries @3% on the net sales price of products sold by the overseas subsidiaries. Thus, the net sale price of the products sold can only be determined at the end of the financ....
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....that the Hon'ble Delhi High Court in Pr.CIT v/s PEC Ltd., [2023] 146 taxmann.com 407 (Delhi) held that amendment brought by way of Explanation 2 to section 37(1) by Finance Act, 2014, with effect from 1-4-2015 is prospective in nature and thus, CSR expenditure incurred prior to 1-4-2015 was to be allowed. Since, in the present case, it is undisputed that the aforesaid expenditure incurred by the assessee is towards its Corporate Social Responsibility, therefore we find no infirmity in the findings of the learned CIT(A) in allowing the expenditure in the year under consideration. As a result, ground no.8 raised in Revenue's appeal is dismissed. 59. The issue arising in ground no.9, raised in Revenue's appeal, pertains to sundry balances written off. 60. The brief facts of the case pertaining to this issue, as emanating from the record, are: During the year under consideration, the assessee has written off various old balances lying in its books of accounts. During the assessment proceedings, the assessee was asked to show cause about its allowability. In response thereto, the assessee submitted that during the year it has written off certain balances amounting to Rs. 2,37,64,6....
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....nd no.9 raised in Revenue's appeal is allowed for statistical purposes. 64. The issue arising in ground no.10, raised in Revenue's appeal, pertains to the deletion of the addition of subsidy received from the Government of Maharashtra under Package Scheme of Incentives, 2007. 65. The brief facts of the case pertaining to this issue, as emanating from the record, are: During the year under consideration, the assessee credited a sum of Rs. 31,49,397 in its Profit and Loss account as a subsidy received from the Government of Maharashtra but the same was not considered as taxable. During the assessment proceedings, the assessee was asked the reason for its non-taxability. In response thereto, the assessee submitted that the Government of Maharashtra had announced the Package Scheme of Incentives, 2007 to encourage the dispersal of industries to the less-developed areas of the State. It was further submitted that the assessee has put up a manufacturing facility that satisfies the criteria of "Mega Project" under the Package Scheme of Incentives, 2007. It was submitted that the assessee has credited a sum of Rs. 31,49,397 as a subsidy received from the Government of Maharashtra under t....
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....s, the Government of Maharashtra vide letter dated 30/06/2009, forming part of the paper book from pages 211-212, conferred the status of "Mega Project" on the proposed project. We find that in this regard the assessee also entered into a Memorandum of Understanding dated 31/05/2010 with the Government of Maharashtra, forming part of the paper book from pages 213-215, under which the assessee was granted Electricity Duty Exemption, Exemption from payment of stamp duty, and Industrial Promotion Subsidy. 68. We find that the Hon'ble jurisdictional High Court in CIT v/s Kirloskar Oil Engines Ltd. [2014] 364 ITR 88 (Bombay) after considering the decision of the Hon'ble Supreme Court in Ponni Sugars and Chemicals Ltd. (supra) and Sahney Steel & Press Works Ltd. v. CIT [1997] 228 ITR 253 (SC), observed as under:- "6. .....We are unable to accept this stand. In the case of in Sahney Steel & Press Works Ltd. v. CIT [1997] 228 ITR 253/94 Taxman 368 (SC) and in Ponni Sugars & Chemical Ltd.'s. case (supra), the honourable Supreme Court has emphasized that the character of receipt in the hands of the assessee has to be determined with respect to the purpose for which the subsidy is give....