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2015 (7) TMI 1026 - HC - Income TaxSales Tax Subsidy - revenue v/s capital receipt - tribunal had decided the issue against the assessee - Held that:- Apex Court in CIT vs. Ponni Sugars and Chemicals Limited, (2008 (9) TMI 14 - SUPREME COURT) and Sahney Steels & Press Works Limited and others vs. CIT, (1997 (9) TMI 3 - SUPREME Court) adjudicated similar issue and held that for determining the nature of receipt of subsidy, the purpose test is to be applied. In other words, it has been laid down that the purpose for which subsidy has been paid will be the determinative factor for ascertaining the nature of receipt i.e. capital or revenue. The aforesaid decision was followed by this Court in ITA No.679 of 2010, The Commissioner of Income Tax v. Siya Ram Garg HUF [2010 (12) TMI 955 - Punjab and Haryana High Court]. Accordingly, the matter is remanded to the Tribunal to pass a fresh order after hearing the parties in view of the decision of the Apex Court in Ponni Sugars's case (supra) in accordance with law. - Decided in favour of assessee for statistical purposes. Disallowing the interest under section 36(1) (iii) on interest free loans granted to sister concern - Held that:- Hon’ble Apex Court in S.A.Builders’s case (2006 (12) TMI 82 - SUPREME COURT) held that the commercial expediency is to be seen for allowing or disallowing the deduction under Section 36(1) (iii) of the Act where interest free loans had been advanced to sister concern. In the present case, since the Tribunal had not decided the issue by recording any finding whether there was commercial expediency or not, the matter requires to be remitted back to the Tribunal to decide this issue also afresh.- Decided in favour of assessee for statistical purposes.
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