TMI Blog1985 (11) TMI 43X X X X Extracts X X X X X X X X Extracts X X X X ..... cer for the assessment years 1979-80 and 1980-81, respectively, being sales tax subsidy received by the assessee ? " The facts giving rise to this reference, as per the statement of case received may be stated, in brief, thus.-Daring the two years in question, the respondent-assessee received sales tax subsidies of Rs. 24,481 and Rs. 66,990, respectively. The Income-tax Officer was of the opinion that these receipts were revenue in nature and, as such, liable to be taxed as the income of the assessee. Consequently, he added these amounts in the assessee's hands. This was confirmed by the Appellate Assistant Commissioner on appeal. On a further appeal being filed by the assessee before the Tribunal, it deleted the additions with the follow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nstead of subsidy. However, those units which were registered on and after September 15, 1969, but before March 31, 1971, will only get 50%. Similarly, those units which are registered with the Department after March 31, 1971, but before April 1, 1972, will get this subsidy only for period of 3 years. The quantum of subsidy in a year would, however, be limited to 8% of the capital investment. " Hence, this reference at the instance of the Department. Learned counsel for the applicant has submitted I. A. No. 3957 of 1985 under section 58 of the Income-tax Act for supplementary statement of facts on the ground that the learned Income-tax Appellate Tribunal has not recorded essential facts on the point of object and purpose of giving subsi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent. of the sales tax paid in the last three years or 8 per cent. of the capital actually employed, whichever is less. He, therefore, submitted that this payment of subsidy by the M. P. Government was for the purpose of helping the growth of industry and development of backward areas by setting up new industries and not to supplement the profits of the assessee and, therefore, it was in the nature of a capital receipt, there being no intention of the Government to supplement the profits which may be earned in the industries. He also submitted that this is not a case of refund of sales tax but it is a case of subsidy which is subject to certain terms and conditions. He, therefore, submitted that merely because the subsidy is treated as a sal ..... X X X X Extracts X X X X X X X X Extracts X X X X
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