TMI Blog2007 (5) TMI 187X X X X Extracts X X X X X X X X Extracts X X X X ..... Act - the question referred to us is answered in the affirmative, i.e., in favour of the assessee and against the Revenue - 48 of 1992 - - - Dated:- 15-5-2007 - R. K. AGRAWAL and BHARATI SAPRU JJ. JUDGMENT The judgment of the court was delivered by R. K. AGRAWAL J.—1. The Income-tax Appellate Tribunal, New Delhi, has referred the following question of law under section 256(1) of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Indian made foreign liquor at its factories at Shamli and Pilkhani. The assessee-company purchased its requirements of sugarcane from two sources, i.e., at the mill premises and from village centres, earmarked for the purpose by the District Cane Officer appointed by the Government of Uttar Pradesh. The assessee paid the following sums and claimed them as deductions under section 37(1) of the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he accounts in respect of the entire manufacturing operations and also lease out a portion of its vacant land. The assessee disclosed the royalty received from these operations in the assessment year 1986-87 as its income. The Inspecting Assistant Commissioner (Assistant) Range I, Muzaffarnagar, accepted the assessee's claim for the deduction of the commission and subsidy and also taxed the royalt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have come out that the assessee was the owner of the income while Jagat Jeet Industries would only be entitled to receive the royalty. The converse proposition was thus accepted as real by the Inspecting Assistant Commissioner (Assessment) without making proper enquiries. In order to rectify these mistakes, he initiated proceedings under section 263 of the Act and eventually cancelled the assessm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ne and was clearly allowable under sub-section (1) of section 37 of the Act. 7. We have heard learned counsel for the parties. 8. We find that it is not in dispute that the amount of subsidy and commission had actually been paid by the respondent-assessee to the cane growers. It does form part of the cane price and, thus, was allowable under sub-section (1) of section 37 of the Act. 9. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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