2018 (8) TMI 2132 - AT - Income Tax

Revenue appeal dismissed; subsidy confirmed as capital receipt under Chhattisgarh policy; no new evidence found.

DCIT- 2 (1), Raipur (CG). Versus M/s Bajrang Power And Ispat Ltd.

The Tribunal dismissed the Revenue's appeal, upholding the CIT(A)'s decision to delete the addition of Rs. 3,41,28,862/- as a revenue receipt. The ... Nature of receipt - subsidy received - revenue or capital receipt - AO noted that the subsidy was received after commencement of production and, therefore, it is the nature of revenue subsidy because it was given to the assessee after commencement of production to enable it to run the business more profitably and it is an operation subsidy - HELD THAT:- We find identical issue had come up before the Tribunal in assessee’s own case [2015 (11) TMI 1865 - ITAT RAIPUR] as upheld the order of the ld. CIT(A) deleting the addition. While doing so, the Tribunal has followed the decision of Reliance Industries Ltd. [2003 (10) TMI 255 - ITAT BOMBAY-J], therefore, in absence of any contrary material brought to our notice, we do not find any infirmity in the order of the ld. CIT(A) deleting the addition made by the Assessing Officer. The ground raised by the Revenue is accordingly dismissed. Issues involved:1. Justification of deleting the addition of subsidy received as a revenue receipt.Detailed analysis:The appeal was filed by the Revenue against the order of the CIT(A) relating to the assessment year 2010-11. The main issue raised was whether the CIT(A) was justified in deleting the addition of Rs. 3,41,28,862/- made by the Assessing Officer on account of the subsidy received as a revenue receipt. The assessee, engaged in manufacturing, had claimed the subsidy as a capital receipt based on the investment policy of the Government of Chhattisgarh. The Assessing Officer contended that the subsidy was a revenue subsidy as it was received after the commencement of production to enhance business profitability. The Assessing Officer made the addition to the total income, which was challenged by the assessee.The CIT(A), in line with the decision for the previous assessment year, deleted the addition made by the Assessing Officer. The Tribunal noted that a similar issue had been decided in favor of the assessee in the preceding assessment year. Referring to the decision of the Mumbai Special Bench of the Tribunal in the case of DCIT vs. Reliance Industries Ltd., the Tribunal upheld the CIT(A)'s order. Since no contrary material was presented, the Tribunal found no fault in the CIT(A)'s decision to delete the addition. Consequently, the ground raised by the Revenue was dismissed, and the appeal was consequently dismissed.In conclusion, the Tribunal upheld the CIT(A)'s decision to delete the addition of the subsidy as a revenue receipt, as the issue had been previously decided in favor of the assessee in the preceding assessment year. The Tribunal found no infirmity in the CIT(A)'s order and dismissed the appeal filed by the Revenue.