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TMI Blog2008 (6) TMI 344X X X X Extracts X X X X X X X X Extracts X X X X ..... - These appeals are filed by the Revenue against the order of the Income-tax Appellate Tribunal, Madras "C" Bench dated February 10, 2006 in I. T. A. Nos. 2032 to 2034/Mds/2004. The relevant assessment years are 1996-97, 1997-98 and 1998-99. The substantial questions of law formulated in these appeals are as follows : "1. Whether in the facts and the circumstances of the case, the Tribunal was ri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rn of income, has excluded the sales tax and excise duty from the total turnover and claimed exemption under section 80HHC. For the assessment year 1996-97, in addition to the above claim, the assessee also claimed exemption in respect of the subsidy received in a sum of Rs. 15 lakhs on windmill. The Assessing Officer for the abovesaid three assessment years rejected the claim of the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and excise duty components added to the total turnover and further directed the Assessing Officer to delete the addition of subsidy as well. Not satisfied with the order of the Commissioner of Income-tax (Appeals), the Revenue filed appeals to the Tribunal. The Tribunal dismissed the appeals by upholding the order passed by the Commissioner of Income-tax (Appeals). As against the said order, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... do not emanate from the 'turnover' so also excise duty and sales tax do not emanate from such turnover. Since excise duty and sales tax did not involve any such turnover such taxes had to be excluded. Com-mission, interest, rent, etc., do yield profits, but they do not partake of the character of turnover and, therefore, they are not includible in the 'total turnover'. If so, excise duty and sales ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not a payment, directly or indirectly, to meet any portion of the "actual cost". The expression "actual cost" in section 43(1) of the Income-tax Act, 1961, needs to be interpreted liberally. Such a subsidy does not partake of the incidents which attract the conditions for its deductibility from "actual cost". The amount of subsidy is not to be deducted from the "actual cost" under section 43(1) f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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