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TMI Blog2007 (5) TMI 618X X X X Extracts X X X X X X X X Extracts X X X X ..... mpany, over and above the levy sugar price fixed by the Government was not a trading receipt completely ignoring the facts that the excess price charged represented income which accrued to the assessee-company in terms of interim order of the Calcutta High Court restricting the Government from giving effect to the Sugar Price Control Order of 12-9-1979 fixing the maximum ex-factory price of sugar? 2. Whether on the facts and in the circumstances of the case, the ITAT was legally correct in holding that a statutory liability arose against assessee-company in the previous year under consideration to credit the Levy Sugar Price Equalisation Fund Act, 1976 by an amount of ₹ 7,77,654 being alleged interest for the year on the price re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sugar sales suspense account under dispute shown in the balance sheet under the head current liability . The amount represented the difference between the price realised from the Food Corporation of India in respect of sale of levy sugar, as per the interim order of the High Court, and the price fixed by the Central Government. The Assessing Officer brought the amount to tax treating the same as the trading receipt for the year under consideration. 5. In appeal by the assessee, the Commissioner of Income-tax (Appeals), following his order for the earlier year and the Tribunal s order for the assessment year 1977-78, held that the amount was not a trading receipt in the year but would become taxable on final disposal of the case by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessment year 1984-85. Accordingly, the issue was decided in favour of the assessee. 10. In appeal by the Department, the Tribunal observed that the aforesaid three issues were decided by it in favour of the assessee and against the Department vide order dated 6-4-1985 for the assessment year 1977-78, which was followed in subsequent years. There being no change in the facts and circumstances, the issues raised by the Department, namely, the taxability of the amount of excess sale price of sugar over and above the levy price fixed by the Government and the points regarding deduction of interest payable in terms of Levy Price Sugar Equalisation Fund Act and that in respect of excess realisation for sugar season 1971-72, were decided again ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as subsidy was taxable as a trading receipt. Further, it was held that as the amount had accrued to the assessee in the previous year relevant to the assessment year under consideration and it related to the sugar season covered by the said assessment year, it was the income of the assessee for the year under consideration, the accounts having been maintained on mercantile system. The actual receipt of the draft in next year was not considered to be relevant. Accordingly, the order of the Assessing Officer was upheld. In appeal by the assessee, after analysing the nature of subsidy in this case and referring to the guiding factors laid down in various judicial decisions, referred to in the order, the Tribunal upheld the finding of the Comm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the cane price paid by the assessee is a revenue expenditure and, therefore, any amount provided as aid for making revenue expenditure, would partake the nature of a revenue receipt. 16. We are fortified by a decision of the Apex Court in the case of Sahney Steel Press Works Ltd. v. CIT [1997] 228 ITR 253 1, wherein the Apex Court has held that the payment in the nature of subsidy from the public fund are made to the assessee to assist him in carrying on his trade or business, they are trade receipts. 17. In view of the aforesaid decision, we answer the question referred at the instance of the assessee in favour of the revenue and against the assessee. In view of divided success, the parties are directed to bear their own costs. - ..... X X X X Extracts X X X X X X X X Extracts X X X X
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