TMI Blog2019 (9) TMI 293X X X X Extracts X X X X X X X X Extracts X X X X ..... 1(1) of the Act, the first requirement is as to whether in the assessment of the assessee, an allowance or deduction has been made in respect of loss, expenditure or the trading liability incurred by the assesse in CBDT Circular No. 496 dated 25.9.1987 it has been clearly stated that the statutory liability shall be treated to have been discharged for the purposes of Section 43B - the Tribunal rightly concluded that it is incorrect or erroneous to hold that the assessee obtained benefit of reduction of Sales Tax liability under section 43B of the I.T. Act as per Central Board of Direct Taxes' Circular No. 496 dated 25th September, 1987. Some time has to be given to the unit to establish itself before it starts giving correspondin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stified in treating the income of ₹ 29,78,35,632/- being gain on prepayment of sales tax deferral loan as capital receipts. 2. Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) was justified in not accepting the income liable to be charged to tax as deemed profits and gains of firm u/s. 41(1) of the Act. 3. The appellant craves leave to add, amend or alter any of the above ground of appeal. 3. Shri Ali Asgar appearing on behalf of the assessee submitted that the assessee is engaged in manufacturing/assembly of automotive seating systems and interior parts. The assessee was covered by the Government of Maharashtra Package Scheme of Incentives, 1993 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee could not be termed as remission or cessation u/s. 41(1) of the Act. The difference credited to reserve account was held as capital receipt. The ld. AR further pointed that the decision rendered in the case of Commissioner of Income Tax Vs. Sulzer India Ltd. (supra) was affirmed by Hon ble Supreme Court of India in the case of Commissioner of Income Tax Vs. Balkrishna Industries Ltd. reported as 300 CTR 209. 4. On the other had Shri N. Ashok Babu representing the Department vehemently defended the assessment order. 5. Both sides heard. Orders of authorities below perused. The solitary issue raised in the appeal by the Revenue against the order of Commissioner of Income Tax (Appeals) is holding the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Incentive to establish a unit or factory in a industrially backward or hilly area is the core of the Sales Tax Deferral Scheme. Some time has to be given to the unit to establish itself before it starts giving corresponding benefit to the state. That opportunity is granted by deferring the remittance of the Sales Tax collected by the unit like the Assessee. In that regard, we have perused the compilation of admitted documents placed on record by Shri. Dastur. From a perusal thereof, it is apparent that the Government Resolution dated 4th May, 1983 evolves a package of incentives to disperse the industries from Bombay Thane Pune belt and to attract them to underdeveloped and developing areas of the State of Maharashtra. This package evolve ..... X X X X Extracts X X X X X X X X Extracts X X X X
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