TMI Blog2008 (8) TMI 351X X X X Extracts X X X X X X X X Extracts X X X X ..... by the assessee by selling the additional quantity of the levy sugar as free sugar cannot be said to be capital receipt and the same is nothing but revenue receipt of the assessee. – Further it is held that the production incentive bonus is deductible - 100 of 2007 - - - Dated:- 22-8-2008 - PRAFULLA C. PANT and DHARAM VEER JJ. Pitanzber Maulekhi for the appellant. Ms. Puja Banga for the respondent. JUDGMENT The judgment of the court was delivered by PRAFULLA C. PANT J. - This appeal, preferred under section 260A of the Income-tax Act, 1961, is directed against the judgment and order dated January 31, 2006, passed by the Income-tax Appellate Tribunal, Delhi Bench "E", New Delhi, whereby the said Tribunal has al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid appeal was registered as Appeal No. 23/KSP/CIT(A)/DDN/2001-02 and after hearing the parties decided on January 1, 2002, setting aside the disallowance on account of production incentive bonus and addition made in the income, on account of excess realization of incentive by the Assessing Officer (hereinafter referred to "AO"). Aggrieved by said order, passed by the Commissioner of Income-tax (Appeals), I.T.A. No. 1048/Delhi/2002 was preferred by the Revenue before the Income-tax Appellate Tribunal (hereinafter referred as "the ITAT"), New Delhi. The Income-tax Appellate Tribunal after hearing the parties upheld the view taken by the Commissioner of Income-tax (Appeals) on the deduction allowed on production incentive bonus and addition r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... [1999] 238 ITR 445, in which a Division Bench of the Calcutta High Court has held that where the incentive has been received by the assessee for payment of loan, which was taken for expansion of sugar factory, the amount so received is capital revenue and cannot be said to be part of taxable revenue. 7. The Assessing Officer, while making addition of Rs. 1,96,84,098 in the income shown in the return of the assessee, on account of excess realizalion of incentive, in the present case, has observed as under: " It is noticed that the assessee-society has received a sum of 1,96,84,098.75 incentive on sale of additional release of free sugar but the assessee has treated it as capital receipt though it is clearly in the nature of revenue r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . In support of this stand reliance was placed on the following judicial pronouncements: (1) CIT v. Balarampur Chini Mills Ltd. [1999] 238 ITR 445 (Cal). The learned counsel had further pointed out that the learned Commissioner of Income-tax (Appeals), Bareilly, in his order in the appellant's own case for the assessment years 1991-92 and 1994-95 had held that the incentive received under the Sampath Incentive Scheme was of capital nature. On the basis of the above judicial pronouncement and the Commissioner of Income-tax (Appeals)'s order the learned authorised representative pleaded that the amount of incentive received under the Sampath Incentive Scheme should be treated as of capital nature. I have carefully considered the facts and d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nswered. 10. Answer to question of law No.(2) So far as the disallowance of production incentive bonus to the tune of Rs.35,07,196 by the Assessing Officer, which is set aside by the Commissioner of Income-tax (Appeals) and not interfered by the Income-tax Appellate Tribunal is concerned, it is brought to our notice that a Division Bench of this court in Income-tax Appeal No. 16 of 2004, CIT v. Kichha Sugar Co. Ltd. vide its judgment and order dated April 27, 2007, has held that the production incentive bonus is liable to be deducted but only to be allowed when the payment of bonus is made in the assessment year in question. The Division Bench of this court in the said case has discussed the provisions of section 36, section 37 and sect ..... X X X X Extracts X X X X X X X X Extracts X X X X
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