9911796707
TMI Blog1999 (2) TMI 46X X X X Extracts X X X X X X X X Extracts X X X X ..... e Income-tax Act, 196 1, the following questions of law, relating to the assessment year 1980-81, to be referred by the Income-tax Appellate Tribunal (for short, the "Tribunal"), to this court for opinion : " 1. The amount of subsidy is not part and parcel of the owned capital of the assessee. Since the amount of subsidy is not owned by the assessee till period of five years is over (the period ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ital of the assessee-company for the purpose of allowing statutory deduction from the chargeable profits, the Assessing Officer did not include the Central subsidy amounting to Rs. 3,20,100 on the plea that the amount of subsidy received by the assessee-company from the Government was not in the nature of a reserve created out of profits and was not part of the company's capital. On the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of its factory in a backward area. The assessee-company claimed before the Assessing Officer that the amount of subsidy is includible in the capital employed in the industrial undertaking for the purpose of surtax. The Assessing Officer wrongly rejected the claim. The amount of Central subsidy was not a liability as it was received as a capital receipt. The Second Schedule to the Act contai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ive not for the specific purpose of meeting a portion of the cost of the assets, though quantified as or geared to a percentage of such cost. If that be so, it does not partake of the character of a payment intended either directly or indirectly to meet the 'actual cost"'. In the light of the ratio in the case of CIT v. P. J. Chemicals Ltd. [1994] 210 ITR 830 (SC), there is no room for any doubt ..... X X X X Extracts X X X X X X X X Extracts X X X X
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