DY. COMMISSIONER OF INCOME TAX Vs. ASSAM INDUSTRIAL DEVELOPMENT CORPN. LTD.

JUDGEMENT

(1.) THESE are three appeals and one CO filed against the two separate orders of the Commissioner (Appeals). The revenue has filed an appeal against the order of the Commissioner (Appeals) for the assessment year 1990 -91 and the assessee has filed the CO against the same order of the Commissioner (Appeals). The cross -appeals have been filed against the order of the Commissioner (Appeals) for the assessment year 1991 -92. As all the appeals and the CO relate to same assessee and were heard together, they are consolidated and disposed of by this single order for the sake of convenience.

(2.) ASST . yr. 1990 -91 : In IT No. 37/Gau/1997 relating to assessment year 1990 -91 the grounds of appeal agitated by the revenue are as under

(3.) AFTER hearing rival submissions and perusing the orders of both the lower authorities in respect of the ground of appeal, we find that the assessing officer has observed from the balance sheet of the assessee that the assessee has shown liability of Rs. 3,96,86,822 as undisbursed subsidy. The assessing officer further noted that the said amount consisted of capital subsidy of Rs. 2,41,05,155 and Rs. 1,55,4667 on account of subsidies which were revenue in nature. The assessing officer rejected the explanation of the assessee that these amounts were received from the Government for distribution to the persons approved by the Government department. As the assessee has received the amount as an agent only, the same was not its income. According to the assessing officer, the assessee ought to have credited the amount of undisbursed revenue subsidy in its P&L a/c. Hence, he added Rs. 1,55,81,667 to the income of the assessee. The Commissioner (Appeals) found that the Government of Assam vide letter No. 149/69/Pv. 4 dated 8 -2 -1974, appointed the assessee as disbursing agent for subsidy under two schemes which are : (1) 10 per cent Central Subsidy Scheme and (2) Transport Subsidy Scheme. In addition the Government of Assam vide its industrial policies also appointed the assessee as the implementing agency of the State Government. In disbursing various state incentives schemes like subsidy on infrastructural facilities, allotment of factory sheds, equity participation in assisted sector, interest subsidy, power subsidy, feasibility study cost subsidy, etc. The amount of subsidy received by the assessee was not on its own account but was received for further disbursement to the approved persons and hence, the same could not be included by the assessee in the P&L a/c. Thus, the Commissioner (Appeals) deleted the above addition of Rs. 1,55,81,667. We find that no material was brought on record by the revenue to controvert the findings of the Commissioner (Appeals). No material was brought on record to show that the assessee was not liable to disburse the aforesaid amount of undisbursed subsidy at the end of the relevant previous year. Hence, there is no merit on this ground of appeal of the revenue and the same is hereby dismissed.