TMI Blog1998 (2) TMI 93X X X X Extracts X X X X X X X X Extracts X X X X ..... 1979-80 held that the film subsidy received is revenue receipt. The assessee also contended that levy of interest under section 217 of the Income-tax Act is not justified, while the Revenue contended that in the assessment year 1980-81, the Inspecting Assistant Commissioner has waived the interest levied under section 217 and in the assessment year 1981-82 the interest levied under section 217 of the Act is reduced to Rs. 15,000. Since, the assessee has moved for waiver of interest it is not a case where the very levy of interest under section 217 is challenged. He also relied on the judgment of the Supreme Court in Central Provinces Manganese Ore Co. Ltd. v. CIT [1986] 160 ITR 961 where it was held that no appeal lies against levy of inte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IT v. Chitra Kalpa [1989] 177 ITR 540 (AP) wherein it was held : "that the subsidy granted by the Government is in the nature of an inducement and it is a cash grant to induce a producer to produce a feature film in this State in the hope and expectation that if producers are tempted to make feature films in this State, film production in the State will be encouraged and the State will reap the benefits of an organised flourishing film industry shifting to this State from elsewhere. It is not granted to assist the producer in film making and to increase his profits and, therefore, it is not taxable in the hands of the assessee as a revenue receipt". Following the above, we hold that the amount of Rs. 2 lakhs paid by the Andhra Pradesh State ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 27 ITR 192 and held that : "the levy of penal interest under sections 139 and 215 is part of the assessment. Where penal interest is levied under section 215 by the order of assessment, the assessee may altogether deny his liability to pay such interest on the ground that he was not liable to pay advance tax at all or that the amount of advance tax determined by the Income-tax Officer as payable ought to be reduced. In either case, he denies his liability, wholly or partially, to be assessed. Similarly, where interest is levied under section 139 of the Act, the assessee may deny his liability to pay such interest on the ground that the return was not belated or that the penal provision was not attracted at all to his case. In such a case a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tribunal. According to the Tribunal, the application for waiver amounted to admission of liability and, therefore, appeal was not maintainable. But the question of maintainability of appeal arises only when the appeal relates to levy of interest alone. In this case, the assessee denied his liability to pay tax on subsidy and when that is allowed, levy of interest becomes a consequential issue. It has been held in Vittal Reddy v. CIT [1987] 165 ITR 673 (AP) that grounds can be taken with reference to interest when appeal raises other grounds and is otherwise maintainable. This case is on all fours with that decision and hence Central Provinces Manganese Ore Co. Ltd. v. CIT [1986] 160 ITR 961 (SC) does not apply to this case. Hence, we answer ..... X X X X Extracts X X X X X X X X Extracts X X X X
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