CIT Vs. INTEGRATED FINANCE CO LTD

JUDGEMENT

(1.) This appeal is filed under Section 260A of the Income Tax Act, 1961, by the revenue, against the order of the Income Tax Appellate Tribunal, Bench "A", Chennai in I.T. (SS) A. No. 22(Mds)/2003 dated 28-12-2006, raising the following substantial question of law:

(2.) The facts leading tafhe above substantial question of law are as under:

(3.) The assessee-company is a non-banking financial company primarily engaged in the business of hire-purchase and leasing. A raid in the business premises of the assessee was carried out on 18-8-1999. In the course of the raid, several incriminating documents including the lease agreements were found and seized. As the assessee could not establish the existence of leased assets, it had withdrawn the depreciation claimed in respect of the lease transactions with various concerns. Hence, the assessing officer completed the block assessment for the block period 1-4-1989, to 7-10-1999, determining the undisclosed income at Rs. 1,67,15,250. While completing the assessment, the assessing officer made an addition of Rs. 67,50,000 being the difference between the subsidy received amounting to Rs. 1,12,50,000 and the income already offered to tax amounting to Rs. 45,00,000. This amount of subsidy was not admitted for the purpose of income-tax and hence the assessing officer made the above addition as undisclosed income for the block period. Aggrieved by the order, the assessee filed an appeal to the Commissioner (Appeals). The Commissioner (Appeals) held that the same should be assessed only under the regular assessment and not in the assessment for the block period and deleted the addition. Aggrieved, the revenue filed an appeal to the Income Tax Appellate Tribunal ("the Tribunal" in short). The Tribunal dismissed the revenue's appeal and confirmed the order of the Commissioner (Appeals). Hence, the present tax case by the revenue.