TMI Blog2000 (10) TMI 10X X X X Extracts X X X X X X X X Extracts X X X X ..... ital receipt and the CIT held that it was a revenue receipt and dismissed the revision filed by the petitioner herein. It is against the said order, the present writ petitions have been filed. 3. The assessee, writ petitioner herein, filed revision petitions before the CIT for two asst. yrs. 1986-87 and 1987-88 and the point that was raised by the petitioner was that the purchase-tax subsidy given to the petitioner by the Government of Tamil Nadu which was earlier returned as business income was liable to be treated as capital receipt. In G.O. Ms. No. 1294, Industries Department, dt. 24th Oct., 1975, it is stated that the Government of India had constituted a committee to go into the question of viability of sugar factories of 1,250 tcd. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... up of sugar factories and merely because the subsidy given is equivalent to purchase-tax on cane, it does not mean that it is a revenue receipt. Learned counsel submitted that the subsidy is not for specific liability and the yardstick cannot override the object of the scheme. Learned counsel referred to the order of the CIT and submitted that the CIT has proceeded on wrong basis and the view of the CIT that the purchase-tax subsidy is a revenue receipt is erroneous. Learned counsel brought to the notice of this Court the decision of the Supreme Court in Sahney Steel Press Works Ltd. vs. CIT (1997) 142 CTR (SC) 261 : (1997) 228 ITR 253 (SC) : TC S13.1361 and submitted that on the basis of the decision of the Supreme Court, the subsidy whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e decision of the Supreme Court in Sahney Steel Press Works Ltd. case would apply to the facts of the case as in that case also under the scheme, the payments were made directly or indirectly not for the setting up of the industries, but the payments were made only after the production was commenced and the subsidy received was held to be revenue receipt. On the facts of the case, under the scheme, the payments of subsidy were made not for the purchase of capital items, and it was not tied up with the purchase of machinery or for future expansion of the industry. In other words, it was given without any prior condition attached to it and it is open to the petitioner to utilise the same for any of its purposes including its business purpos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Janarthana Raja, learned counsel that the reasonings given by the CIT may not be quite accurate, a fair reading of the scheme clearly shows that the ultimate conclusion arrived at by the CIT that the subsidy amount is a revenue receipt is sustainable in law and since his ultimate conclusion is correct, it is not necessary to remit the same to him to arrive at the same conclusion by a different process of reasonings. I, therefore, hold that the subsidy received by the petitioner was rightly held by the CIT as revenue receipt. Both the writ petitions fail and are dismissed. However, in the circumstances there will be no order as to costs. Consequently, W.M.P. Nos. 24864 and 24865 of 1990 are closed. - - TaxTMI - TMITax - Income Ta ..... X X X X Extracts X X X X X X X X Extracts X X X X
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