- (1.) THE Income -tax Appellate Tribunal, Allahabad, has referred the following question of law under Section 256(1) of the Income -tax Act, 1961, hereinafter referred to as 'the Act', for opinion to this court: Whether, on the facts and in the circumstances of the case, the Tribunal was legally right in deleting the addition of Rs. 3,29,328 made on account of cash assistance under Section 28(iv) disregarding the provisions of Section 2(24)(va) along with Section 10(3)(ii) of the Income -tax Act, 1961, and Board's Circular No. 1690 dated February 11, 1986 ?
(2.) THE reference relates to the assessment year 1982 -83. Briefly stated the facts giving rise to the present reference are as follows:
(3.) THE respondent -assessee is a registered firm having business in manufacture and sale of engineering items, like cast iron, sleepers, joints and other railway equipment. It had exported some of their goods in the prior accounting years. During this year, i.e., the accounting year ended on October 27, 1981, it had received cash incentives for making exports amounting to Rs. 3,29,328. In the original return filed by the respondent -assessee, this cash incentive was offered for assessment but in the revised return the respondent -assessee claimed that such cash incentive would not be taxable. The Income -tax Officer, relying upon the decision of the Calcutta High Court in the case of Jeewanlal (1929) Ltd. v. CIT : [1983]142ITR448(Cal) and the decision of this court in the case of Agra Chain Manufacturing Co. v. CIT : [1978]114ITR840(All) did not accept the contention of the respondent -assessee and taxed the amount of cash incentive, which was upheld by the Commissioner of Income -tax (Appeals). However, in further appeal, the Tribunal had deleted the addition and has held that the cash compensatory support received from the Government of India against exports would not be a taxable receipt.;