TaxTMI 
TaxTMI 
2017 (1) TMI 902
X X X X Extracts X X X X
X X X X Extracts X X X X
....ignoring case laws, relied upon by the assessee as mentioned in the ground of appeal itself. 2. During hearing of this appeal, the ld. counsel for the assessee, Shri Hariom Tulsyan claimed that the impugned issue is covered by the decision of the Tribunal in the case of assessee itself for Assessment Year 2012-13 order dated 23/09/2016 (ITA No.4375, 2147/Mum/2015) and also another decision of the tribunal in the case of M/s SVG Fashions Ltd. vs DCIT (ITA No.5644/Mum/2011) order dated 23/12/2015. This factual matrix was not controverted by the ld. DR, Shri Purushottam Kumar. 2.1. We have considered the rival submissions and perused the material available on record. In view of the above, we are reproducing hereunder the relevant portion....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t subsidy of Rs. 2,84,21,657/- during the A.Y. 2011-12 and Rs. 2,48,57,810/- during the A.Y. 2012- 13. The same was claimed by the assessee as capital receipt by transferring it to the capital reserve account of TUF Interest. The assessee submitted before the AO that the TUFS was introduced for the purpose of encouraging the acquisition of technologically advanced textile machineries by way of extending loans for the specified purpose through commercial banks / financial institutions on subsidized rates of interest. The AO referred to the decision of Hon'ble Supreme Court in the case of Sahney Steel and Press Works Ltd. (supra) stating that government subsidy received by any, if not reduced from the capital assets for depreciation purpose s....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... and made the addition to the total income of the above amount in the respect the A. Y.s treating the same as revenue receipt instead of capital receipt shown by the assessee. 4. The ld. CIT(A) having gone through the order of the AO and submission of the assessee during the course of appellate proceedings before him observed that the issues is directly covered by the judgment of the Hon'ble Punjab & Haryana High Court in the case of CIT vs. Sham Lal Bansal (2011) 11 Taxman.com 369 wherein the issue was whether subsidy received for payment of loan taken for building and plant machinery under TUF Scheme of the Government is a capital receipt or revenue receipt. In the above decision, their Lordships relied on the judgment of the Hon'ble S....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the TUF Scheme would be a 5% reimbursement on the interest actually charged by the identified financial institutions on the sanctioned projects." 7.1 Now we shall turn to the decision relied on by the ld. DR. In Sahney Steel and Press Works Ltd. (supra), the following has been held: "The payments in the nature of subsidies were made only after the industries have been set up. Payments were not made for the purpose of setting up of the industries. The payments were to be made only if and when the assessee commenced its production. The said payments were made for a period of five years calculated from the date of commencement of production in the assessee's factory. The subsidies were operational subsidies and not capital subsidi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....dy on the investment in compatible machinery. In the instant case, the assessee had taken term loans for technology upgradation and subsidy was released under agreement with Small Industry Development Bank of India. [Para 6] For determining whether subsidy payment was 'revenue receipt' or 'capital receipt,' character of receipt in the hands of the assessee has to be determined with respect to the purpose for which subsidy is given by applying the purpose test. [Para 7] The matter was covered by judgment of the Supreme Court in CIT v. Ponni Sugars & Chemicals Ltd. [2008] 306 ITR 392 /174 Taxman 87 against the revenue and, therefore, no substantial question of law arose. 7.3 In Ponni Sugars and Chemicals Ltd. (supra) ,it ....