TMI Blog2012 (5) TMI 180X X X X Extracts X X X X X X X X Extracts X X X X ..... nst levy of sugar in view of the incentive scheme of the Govt. – Held that:- Grant was not for the purpose of bringing into existence new assets but was for the purpose of making payment to the sugarcane growers thus same shall be treated as capital receipt – Decided in the case of CIT v. Ponni Sugars & Chemicals Ltd. [2008 - TMI - 30719 - SUPREME COURT] that the payment received by the assessee under the Scheme was not in the course of a trade but was of capital nature - in favour of the assessee. - IT APPEAL NO. 165 OF 2003 - - - Dated:- 15-3-2012 - M.M. KUMAR AND ALOK SINGH, JJ. S.K. Mukhi for the Appellant. Rajesh Katoch for the Respondent. ORDER Alok Singh, J. Present appeal is filed under Section 260A of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 of the Appellate Tribunal Rules, 1963: - "1. That the appellant was entitled to claim of deduction u/s 80P(2)(a)(iii) of the Act being co-operative society engaged in marketing of agriculture produce of its members. Hence its total income was not liable to be taxed. 2. That in the alternative, the appellant was entitled to be allowed claim for deduction amounting to Rs. 17464478/- representing benefit earned under the Sampath Incentive Scheme, 1997 being the capital receipt in contra-distinction to revenue receipt as wrongly returned while computing the total income." 4. Learned Tribunal vide judgment dated 24.9.2002 has declined the request of the appellant to raise above-mentioned two additional grounds on the ground that enti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tive society engaged in the manufacturing and sale of sugar out of the sugarcane grown by its members is entitled for deduction under Section 80-P(2)(a)(iii) of the Act. Therefore, we hold that Income Tax Appellate Tribunal was not justified in not allowing additional ground No.1. Accordingly, question No. 1 is answered in favour of the assessee and against the revenue. 8. Hon'ble Apex Court in the case of CIT v. Ponni Sugars Chemicals Ltd. [2008] 174 Taxman 87/306 ITR 392, has held that keeping in mind the object behind the payment of the incentive subsidy, the payment received by the assessee under the Scheme was not in the course of a trade but was of capital nature. In the present case also, we are satisfied that grant was not ..... X X X X Extracts X X X X X X X X Extracts X X X X
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