2010 (10) TMI 1089

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.... case of M/s. Sapna Re-rolling Industries V/s. ITO, ITA No. 1382/PN/2006 (A.Y. 2003-04), order dt. 24.12.2008. The Ld. A.R. also placed reliance on the following decisions : 1) CIT V/s. P.J. Chemicals Ltd. (1994), 210 ITR 830 (SC) 2) Sahaney Steel and Press Work Ltd. V/s. CIT, 142 CTR (SC) 261 3) CIT V/s. K.C.A. Lt.(2005), 198 CTR (Bom) 331 4) CIT V/s. Sterlite Chemical (2008), 166 Taxman 57 (Delhi) 5) CIT V/s. Eggro Paper Moulds Ltd. (2006), 152 Taxman 214(All.) 3. The Ld. D.R., on the other hand, tried to justify the orders of the lower authorities. He submitted that in view of Explanation-10 to Section 43(1) of the Act, any subsidy by whatever name called received from the Government is required to be reduced from the actual c....

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....ount of subsidy in question received by the assessee. In the said case of M/s. Sapna Rerolling Industries v. ITO (supra) before the Pune Bench, the assessee was a Registered firm engaged in the manufacturing of M.S. Bars. In the A.Y. 2002-03, the assessee received an amount of Rs. 6,50,871/- as State Government subsidy, which the assessee directly transferred to Reserves & Surplus. The A.O was, however, of the view that the subsidy was capital in nature and accordingly, the same should have been reduced from the cost of assets in terms of Explanation-10 to Sec. 43(1) of the Act. The Tribunal observed that subsidy in question is not an asset specific subsidy but a general subsidy for location of industrial unit in backward areas. The Tribuna....