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TMI Blog1998 (2) TMI 167X X X X Extracts X X X X X X X X Extracts X X X X ..... theatre known as Pankaj Talkies at Chhindwara (MP). During the accounting year relevant to assessment year under consideration, the assessee received subsidy amounting to Rs. 12,49,877 from the Government of Madhya Pradesh. The assessee treated the subsidy as a capital receipt in its hand, however, the factum of receipt of subsidy was disclosed by way of note appended to the statement of total income filed along with the return of income. During the course of assessment proceedings, the Assessing Officer raised the query with regard to the receipt of subsidy by the assessee. In its reply dated 28-3-1989, the assessee claimed the subsidy as capital receipt. The Assessing Officer completed the assessment under section 143(3) on 31st March, 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l assessment proceedings, the taxability or otherwise of the subsidy received by the assessee was not considered. It was a clear case of omission by the Assessing Officer, who completed the original assessment. As it is a case of clear omission by the Assessing Officer, who completed the original assessment, it is duly covered by section 154 being an apparent mistake. The learned DR further submitted that the issue is now settled by We decision of Hon'ble Apex Court of the country in the case of Sahney Steel & Press Works Ltd. v. CIT [1997] 228 ITR 253/94 Taxman 368. He submitted that the Hon'ble Supreme Court has clearly laid down that the various subsidies like refund of sales tax subsidy on power consumption and exemption from the paymen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bros. [1971] 82 ITR 50 (SC) (b) Sagar Co-operative Central Bank Ltd. v. CIT [1990] 186 ITR 292 (MP), (c) CIT v. Bhawani Prasad Girdharilal & Co.[1991] 187 ITR 257(All.), (d) CIT v. Hero Cycles (P.) Ltd. [1997] 228 ITR 463/94 Taxman 271 (SC), (e) CIT v. General Industries Society Ltd. [1993] 71 Taxman 36(Cal.). He further submitted that even after the decision of the Hon'ble Supreme Court in the case of Sahney Steel & Press Works Ltd., all subsidies are not revenue receipt. In fact, the Hon'ble Supreme Court in the case of Sahney Steel & Press Works Ltd. has stated that the character of the subsidy in the hands of the recipients whether revenue or capital will have to be determined having regard to the purpose for which the subsidy is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d area to establish industries there. The subsidy was not given to subsidies the cost of the capital. He stated that the Hon'ble Supreme Court in the case of Sahney Steel & Press Works Ltd., has not considered and over-ruled the decision in the case of P.J. Chemicals. He submitted that in the case of the assessee also, the subsidy was given as all incentive to establish and run a cinema theatre. Therefore, the decision of the Supreme Court in the case of P.J Chemicals would be applicable rather than the decision in the case of Sahney Steel & Press Works Ltd. He concluded that in any case the issue under consideration is a debatable issue, it is out of the purview of section 154. Therefore, the order of the CIT (Appeals) should be upheld. 6 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Central Bank Ltd. has taken a similar view and held--- "A decision on a debatable point of law is not a mistake apparent from record." In the case of Bhawani Prasad Girdhari Lal & Co. the Hon'ble Allahabad High Court have held :--- "Under section 154 of the Income-tax Act, 1961, only mistake apparent from the record can be rectified. The section does not give power to the ITO to change his opinion and review his order." From the above decisions of the Hon'ble Supreme Court as well as jurisdictional High Courts and other High Courts, it is clear that an apparent mistake is an obvious and patent mistake. A dabatable point of law cannot be said to be a mistake apparent from record. Moreover, section 154 cannot be invoked by the Assessing O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Works Ltd.'s case, all the subsidies are not revenue receipt We have carefully gone through the decision of Hon'ble Supreme Court in the case of Sahney Steel & Press Works Ltd. The Hon'ble Supreme Court has stated--- "The character of the subsidy in the hands of the recipient whether revenue or capital will have to be determined, having regard to the purpose for which the subsidy is given. The source of the fund is quite immaterial. However, if the purpose is to help the assessee to set-up its business or complete a project, the moneys must be treated as having been received for capital purposes." 8. The Hon'ble Supreme Court in this case had examined the different types of subsidies received by different assessees and have held the recei ..... X X X X Extracts X X X X X X X X Extracts X X X X
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