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THE COMMISSIONER OF INCOME TAX, AHMEDABAD - V Versus KISHAN DISCRETIONARY FAMILY TRUST

2016 (8) TMI 112 - GUJARAT HIGH COURT

Deduction u/s 801A - non deduction of amount of subsidy given by the government to the farmers, for the purpose of allowing deduction u/s 801A - Held that:- The issue is squarely covered by the decision of the Hon’ble Supreme Court in case of Commissioner of Income Tax versus Meghalaya Steels Ltd. [2016 (3) TMI 375 - SUPREME COURT ] wherein the Hon’ble Supreme Court by placing reliance on the decision in case of CIT versus Sterling Foods [1999 (4) TMI 1 - SUPREME Court] lays down a very importan .....

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f the asseessee. We therefore answer the question in favour of the assessee and against the revenue. - TAX APPEAL NO. 941 of 2007 - Dated:- 15-7-2016 - MR. KS JHAVERI AND MR.G.R.UDHWANI, JJ. FOR THE APPELLANT : MRS MAUNA M BHATT, ADVOCATE FOR THE OPPONENT : MRS SWATI SOPARKAR, ADVOCATE ORAL JUDGMENT (PER : HONOURABLE MR.JUSTICE KS JHAVERI) 1. Being aggrieved and dissatisfied with the impugned order passed by the Income Tax Appellate Tribunal, Mumbai Bench, E (hereinafter referred to as the Tribu .....

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re that assessee is a Trust mainly engaged in the business of manufacturing of detergents, SSP fertilizers and packing items. During the course of assessment proceedings, it was noticed that the assessee had claimed deduction u/s 801A of the I.T. Act in respect of subsidy received from the Government amounting to ₹ 2, 85,10,727/- . The claim of the assessee was rejected by the assessing officer on the ground that the subsidy had no direct nexus with the profit derived from business of an i .....

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wed the appeal filed by the assessee by directing the Assessing Officer not to deduct the amount of subsidy given by the government to the farmers, for the purpose of allowing deduction u/s 801A of the Act and held that the assesseetrust is entitled for deduction u/s 801A of the Income Tax Act, 1961. Being aggrieved and dissatisfied with the impugned order passed by the Tribunal, the revenue has preferred the present Tax Appeal for consideration of the aforesaid substantial question of law. 4. L .....

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the benefits given to the manufacturers under the scheme. It is further submitted that subsidy has no direct nexus with the profit of an industrial undertaking and therefore, the asseessee is not entitled or qualified for deduction under Section 801A of the Income Tax Act. 6. Mr. Soparkar, learned advocate appearing for the assessee supported the impugned order passed by the Tribunal and submitted that the same having been passed in accordance with law does not call for any interference. He rel .....

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