CIT Vs. PONNI SUGARS & CHEMICALS LTD.

JUDGEMENT

(1.) THE above tax case appeal is directed against the order of the Tribunal in ITA No. 1464/Mad/2000, dated 16 -7 -2005.

(2.) THE revenue is the appellant. The assessment year involved is 1996 -97. The assessee -firm is a manufacturer and seller of sugar. A sum of Rs. 75,48,141, being the price difference realised between levy sugar price and the free market sugar sale price received as an incentive provided by the Central Government excluded from the total income. However, the assessing officer added the said amount to the income and disallowed the Government subsidy holding that the said receipt represents sale price of sugar marketed by the assessee. Aggrieved by the same, the assessee filed an appeal before the Commissioner (Appeals), who allowed the appeal. The Tribunal dismissed the appeal filed by the revenue on the ground that the assessee's case for assessment year 1993 -94 was allowed by deleting the addition made by the assessing officer.

(3.) THE scheme to provide incentives to new sugar factories is framed with the object of augmenting indigenous sugar production, to provide incentive to new sugar factories and expansion projects. The intention of the Government in providing incentives was to place in the hands of the assessee the means to meet a part of the capital costs, which the assessee had been enabled to meet by securing loan from the public financial institutions.