TMI Blog2011 (1) TMI 409X X X X Extracts X X X X X X X X Extracts X X X X ..... determined with respect to the purpose for which subsidy is given by applying the purpose test, as held in Sahney Steel Press Works Ltd.'s case (supra) itself and reiterated in later judgment in CIT v. Ponni Sugars Chemicals Ltd. [ 2008 (9) TMI 14 - SUPREME COURT] referred to in the impugned order of the Tribunal. In view of above, since the matter is covered by judgment of the Hon'ble Supreme Court in Ponni Sugars Chemicals Ltd.'s case (supra) against the revenue, no substantial question of law arises. - IT APPEAL NO. 472 OF 2010 (O&M) - - - Dated:- 17-1-2011 - ADARSH KUMAR GOEL AND AJAY KUMAR MITTAL, JJ. Rajesh Katoch for the Appellant. ORDER Adarsh Kumar Goel, J. This appeal has been preferred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dy scheme was to enhance the technology apparatus of the assessee by assisting in acquiring machinery and further that the subsidy so received was utilized for repayment of loans taken by the assessee to set up the new unit, as was the intention of the subsidy. 10. Considered in the aforesaid light, in our view, the facts of the instant case are on all fours comparable to those considered by the Hon'ble Supreme Court in the case of Ponni Sugars Chemicals Ltd. (supra) and therefore, a natural corollary is that the nature of the subsidy in question is capital. Therefore, both on the issue of the objective of the scheme and on the utilization of the funds received as subsidy, the subsidy is to be viewed as capital in nature having regard t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 6. The purpose of scheme under which the subsidy is given, has been discussed by the Tribunal. To sustain and prove the competitiveness and overall long term viability of the textile industry, the concerned Ministry of Textile adopted the TUFS scheme, envisaging technology upgradation of the industry. Under the scheme, there were two options, either to reimburse the interest charged on the lending agency on purchase of technology upgradation or to give capital subsidy on the investment in compatible machinery. In the present case, the assessee has taken term loans for technology upgradation and subsidy was released under agreement dated 12-7-2005 with Small Industry Development Bank of India. The relevant clause of the agreement under w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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