TMI Blog1996 (6) TMI 49X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the amount as industrial subsidy. The factual matrix shows that this amount was Rs. 1,20,407. The amount was received by the assessee as a subsidy in regard to the development of his industrial concern. The condition in regard thereto was that in the event of the assessee not being able to have benefit in the process of development resulting into the closure of the industrial activity altogether, then and then only the amount was refundable and in default liable to be recovered from him. The assessment year is 1978-79. There is no dispute that the amount was received by the assessee during the assessment year in question as subsidy. The Income-tax Officer treated it to be an asset to be included in the net wealth. The first appellate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... encement of the production of the unit, whichever is later. In other words, the position that the amount of subsidy has to be understood as wealth was not disturbed in any fashion and the only question that was argued was whether it became the wealth at the time of the receipt or it could be understood as wealth five years later, It is, in this context, the Tribunal proceeded to consider the nature of the grant of subsidy. Subsidy was not refundable at all and can be understood to be refundable only in the event of the unit going out of production within a period of five years as stated hereinbefore. In the above situation, the Tribunal brushed aside the contention because it was based on the solitary strength of the fact that this amount w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... liability and the liability as has been consistently held could be said to arise only if the unit of the assessee goes out of production within a period of five years after the commencement and from the date of receipt of the subsidy, whichever is later. Thus, at the time the assessee received the amount, it was income and consequently wealth of the assessee and naturally consequently it goes to the formation of the assets of the assessee. The above discussion will show that the question does not arise at all because the receipt of the income is not a liability at all. For the above reasons, we decline to answer the question referred, but confirm the order of the Tribunal. A copy of this judgment under the seal of the court and the sig ..... X X X X Extracts X X X X X X X X Extracts X X X X
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