High Court Of Madras
Chengalrayan Co-Operative Sugar Mills Ltd. vs. CIT
Section 2(24)(vd), 28(iv)
Asst. Year 1986-87
N.V. Balasubramanian & K. Raviraja Pandian, JJ.
T.C. No. 39 of 1999
2nd December, 2002
Counsel Appeared
P.P.S. Janardhana Raja, for the Assessee : Mrs. Pushya Sitharaman, for the Revenue
JUDGMENT
N.V. Balasubramanian, J. :
At the instance of the assessee, the Tribunal has stated a case and referred the following question of law :”Whether, on the facts and in the circumstances of the case, the Tribunal was justified in taking a view that the sum of Rs. 1,24,05,255 being purchase price and excise duty rebate/incentive is a benefit and, therefore, an income from business assessable to tax as provided in s. 2(24)(vd) r/w s. 28(iv) of the IT Act, 1961 ?” or “Whether, on the facts and in the circumstances of the case, the sum of Rs. 1,24,05,255 was trading receipt and consequently business income of the assessee for the previous year relevant to the asst. yr. 1986-87 ?”
2. We find that the procedure adopted by the Tribunal to refer a question as well as an alternative question enabling this Court to choose anyone of the questions to answer is not a proper procedure. The Tribunal, at the time of forwarding the statement of case should formulate the question or questions for consideration by this Court, instead of referring alternative questions enabling this Court to choose anyone of them as it may think fit. We do not appreciate the procedure adopted by the Tribunal in referring alternative questions for the consideration of this Court. However, we are of the view that the following question of law is deemed to be the question that has been referred by the Tribunal for our consideration : “Whether, on the facts and in the circumstances of the case, the Tribunal was justified in taking a view that the sum of Rs. 1,24,05,255 being purchase price and excise duty rebate/incentive is a benefit and, therefore, an income from business assessable to tax as provided in s. 2(24)(vd) r/w s. 28(iv) of the IT Act, 1961 ?”
3. Learned counsel for the assessee, in his fairness, submitted that the part of the question is liable to be answered against the assessee. He also submitted that the Tribunal has not given break-up figures of the amount which is the subject-matter of the tax case. Learned counsel referred to an unreported decision in TC No. 492 of 1996 CIT vs. Ponni Sugars & Chemicals Ltd. (2003) 179 CTR (Mad) 477 : (2003) 260 ITR 605 (Mad) (in which one of us was a party) wherein this Court, by judgment, dt. 16th Sept., 2002, has held that the purchase-tax subsidy would form part of business income, but the excise duty rebate or excise duty incentive are not the income of the assessee, but a capital receipt. In the instant case, the Tribunal has referred to a combined and consolidated figure and the break- up figures of the amounts which are the subject-matter of the tax case are not available. Accordingly, we hold that the purchase-tax subsidy received by the assessee would form part of the income from business, however, the excise duty rebate or excise duty incentive would not form part of income from the business assessable to tax under s. 28(iv) of the IT Act. Since a consolidated amount is referred to in the question, the Tribunal is directed to determine which part of the amount would represent the purchase price and which part of the amount would represent excise duty rebate or excise duty incentive which is not taxable under the IT Act. Though we technically answer the question of law referred to in para 2 of the judgment in favour of the Revenue, we remit the matter to the Tribunal to consider and determine the question which part of the amount would represent the purchase price which is taxable under the IT Act as business income and which part of the amount would represent the excise duty rebate or excise duty incentive which is not taxable under the IT Act. The question is answered accordingly.
No costs.
[Citation : 261 ITR 575]
