Commissioner Of Income Tax v. M/S Kisan Sahkari Chini Mills Ltd

IN THE HIGH COURT OF UTTARAKHAND ATNAINITALINCOME TAX APPEAL No. 99 of 2007 Commissioner of Income Tax …..Appellant. Versus M/s Kisan Sahkari Chini Mills Ltd., Sitarganj, District- U.S. Nagar. ……Respondent. Mr. Pitambar Maulekhi, learned counsel for the appellant. Ms. Puja Banga, learned counsel for the respondent. Dated: 26.11.2008 Coram : Hon’ble P.C. Verma, J. Hon’ble Sudhanshu Dhulia, J. This appeal has been preferred under Section 260A of the Income Tax Act, 1961 against the order dated 28.7.2006 passed by the Income Tax Appellate Tribunal, Delhi Branch “D” NEW Delhi in ITA NO. 2613/Del/2003 for the assessment year, 1998-99. 2. Following substantial questions of law arose for determination before us: “A. Whether on the facts and in the circumstances of the case, learned ITAT was legally justified in upholding that assistance in the form of permission to sell higher percentage of levy free sugar and excise duty concession was not in the nature of revenue receipt without appreciating the ratio of apex court’s decision in the case of Sahney Steel of Press Works Ltd. Vs. CIT (1997) 228 ITR 253 (SC) and Allahabad High Court’s decision in Kishan Sahkari Chini Mills Ltd. 284 ITR 418 (All). B. Whether on the facts and in the circumstances of the case, learned ITAT was legally justified in directing the Assessing Officer to reduce the cost of assets by the value of subsidy granted under Sampat Incentive Scheme whereas such subsidy is not received in relation to any particular asset?” 3. So far as first substantial question of law is concerned, both the parties have agreed that the same is squarely covered by the judgment dated 27.4.2007 passed by Division Bench of this Court in ITA No. 16 of 2004 Commissioner of Income Tax, Haldwani Vs. M/s Kichha Sugar Company Ltd., Kichha Udham Singh Nagar and the question of law is decided in terms of the finding recorded in the aforesaid appeal. Therefore, present appeal is decided on same terms and conditions. 4. So far as the second substantial question of law is concerned, we hold that since the incentive is a capital receipt, therefore, the total amount of incentive shall be reduced from the capital assets of the Sugar Mills. 5. Accordingly, present Income Tax Appeal is disposed of finally. (S. Dhulia, J.) (P.C. Verma, J.) 26.11.2008 26.11.2008 Rathour