TMI Blog2010 (12) TMI 955X X X X Extracts X X X X X X X X Extracts X X X X ..... emicals Ltd. (2008 (9) TMI 14 - SUPREME COURT) which has been followed by the Tribunal Excess payment made to sister concern on account of purchases within the meaning of provisions of sec.40A(2) - addition on the ground that the assessee had paid higher rate to its sister concern while purchasing cotton and waste – Held that:- CIT(A) upheld the plea of the assessee that the payment was not higher than the normal rate. It was held that the goods purchased at lesser rate were of inferior quality, the details filed by the assessee showed that its sister concerns were being taxed at the same rate at which the assessee was being taxed, proving that there was no reason for the assessee to show higher rate purchases made by the assessee from i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act?" 2. The assessee is engaged in manufacture of yarn. It received subsidy of 12,16,090/- from Haryana Government and claimed to be exempt from tax on the ground that the same was capital receipt. The Assessing Officer disallowed the claim of the assessee by holding that subsidy was granted on 27.1.1995 while operations of the assessee commenced on 16.11.1994. Reliance has been placed on judgment of the Hon'ble Supreme Court in Sahney Steels and Press Works Ltd. and others v. CIT 228 ITR 253 and judgment of this Court in CIT v. Abhishek Industries Ltd. 286 ITR 1. The CIT(A) allowed the appeal of the assessee holding that the subsidy was for setting up of industrial unit in backward area of Haryana and same has to be treated as capita ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o do not take anything away from the case of the assessee, as has been observed by the ld CIT(A) in as much as therein, the issue was as to what is a revenue subsidy which is taxable. It was held, inter alia, that subsidy granted for setting up of industry is not of revenue nature. That being so, there is no force in the allegation of the department that the ld CIT(A) ignored "Sahni Steel and Press Work Ltd. vs. CIT" (supra) and ""CIT vs Raja Ram Maize Products" (supra)." 3. We have heard learned counsel for the appellant. 4. It is clear from the findings recorded by the CIT(A), as affirmed by the Tribunal that the subsidy was given for setting up of industrial unit in backward area of Haryana and was to be determined with reference ..... X X X X Extracts X X X X X X X X Extracts X X X X
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