Madhya Pradesh H.C : There was no finding to the effect that sales-tax subsidy could be treated as a revenue receipt

Counsel Appeared

None, for the Assessee : D. D. Vyas, for the Revenue

A. R. TIWARI, J.:

The applicant (CIT, Bhopal), has filed this application under s. 256(2) of the IT Act, 1961 (for short, “the Act”), seeking direction to the Tribunal to state the case and refer the proposed questions of law, as extracted below, arising out of the order dt. 28th June, 1991, passed by it in I. T. A. No. 367/(Ind) of 1989 after rejection of its application registered as R. A. No. 253/(Ind) of 1991 on 12th Dec., 1991, for the asst. yr. 1987- 88, for our opinion:

“(1) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in dismissing the appeal holding that there was no finding to the effect that sales-tax subsidy could be treated as a revenue receipt ?

(2) Whether, on the facts and in the circumstances of the case, the sales tax subsidy received by the assessee was not liable to be included in the total income of the assessee ?

(3) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in dismissing the appeal without looking into the merits of the case before it ?”

Briefly stated, the facts of the case are that the AO found that the assessee received sales-tax subsidy of Rs. 38,631 which was treated by him as a revenue receipt. In appeal, the CIT (A) held that the same was a capital receipt and accordingly deleted the addition. The applicant then filed an appeal before the Tribunal. Following the decision reported in CIT vs. Dusad Industries (1986) 51 CTR (MP) 217 : (1986) 162 ITR 784 (MP), the Tribunal dismissed the appeal and upheld the order of the CIT (A). The applicant then filed application under s. 256(1) of the Act, which was rejected. Thereafter the applicant has filed this application.

We have heard Shri D. D. Vyas, learned counsel for the applicant/ Department. None appeared for the non- applicant/assessee.

The appeal, I. T. A. No. 367/(Ind) of 1989, was dismissed by the Tribunal as under: “Finding of the ITO as to the amount of sales-tax subsidy being a revenue receipt has been reversed by the CII (A) holding it as a capital receipt. The Department is, therefore, in appeal.

The point in issue is covered by CIT vs. Dusad Industries (supra) against the Department. We, therefore, find no merit in the appeal.

In the result the appeal is dismissed. As the order was based on the decision rendered by this Court, the application seeking reference was also rejected.

The point stands concluded by the aforesaid decision. Nothing substantial is urged to take a different view in the matter. We are thus satisfied about the correctness of the order passed by the Tribunal and hold that there are no referable questions of law, as noted above.

The application is accordingly rejected.

Counsel fee for the applicant is, however, fixed at Rs. 750, if certified.

[Citation : 224 ITR 43]