TaxTMI 
TaxTMI 
2018 (5) TMI 128
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.....2016 for assessment year 2013-14. The grounds of appeal raised by the Revenue reads as follows:- "1."That on the facts and in the circumstances of the case and in law, the Ld. CIT(Appeals) has erred in allowing the amount of Rs. 2,34,84,055/- and Rs. 82,192/- on account of Excise Duty refund and interest subsidy respectively as capital receipt." 2. That the Ld. CIT(Appeals)has not taken into account the verdict in the following cases: a) Sehanay Steel Pres Works Ltd. & Ors vs. CIT (1997) 228 ITR 253 b) Kesoram Industries & Cotton Ltd. vs. CIT (1991) 191 ITR 518 3. "Any other ground, appellant craves leave to submit on or before the hearing of appeal." Shri Arindam Bhattarchejee, Ld. Departmen....
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.... subsidy and taxable under the Act. The AO also observed that no capital expenditure was incurred by assessee out of such incentive as discussed above. The amount of incentive given to assessee was available for the utilization as per its volition. In view of the above, AO held that the incentive received by assessee are chargeable as business receipt and accordingly added to the total income of assessee. 4. Aggrieved, assessee preferred an appeal before Ld. CIT. The assessee before Ld CIT(A) submitted that the amount of subsidy was received by it in terms of Industrial Policy (2002-2015) which is on account of promotion of industry in the State of Jammu & Kashmir. Therefore, the same has to be treated as capital in nature. The assessee ....
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.... heard the rival submissions made by the parties. We have also examined the orders passed by the Authorities Below and the judgments/ orders cited by the representatives of both the parties. In the present case the amount of excise duty refund and interest subsidy was treated by the AO as revenue receipt subject to tax. The reason given by AO is that the impugned amount was given to assessee after the commencement of commercial production. However, the Ld. CIT(A) reversed the order of AO on the ground that on identical facts and circumstances the Hon'ble Jammu & Kashmir High Court in the case of Shree Balaji Alloys (supra) has treated the impugned receipt as capital in nature and accordingly not chargeable to tax. The relevant extract o....
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....morandum and statutory notifications issued in this behalf, to the appellants-assessees, cannot be construed as mere Production and Trade Incentives, as held by the Tribunal." The facts of the case on hand are exactly identical with the case law of Shree Balaji Alloys (supra). The judgment of the Hon'ble High court in the case of Balaji Alloys (supra) was subsequently confirmed by the Hon'ble Apex Court reported in Civil Appeal No.10061 of 2011 in the case of CIT, Jammu & Anr. vs. M/s Shree Balaji Alloys wherein the Hon'ble Supreme Court held as under:- "The issue raised in these appeals is covered against the Revenue by the decision of this Court in "Commissioner of Income Tax, Madras Vs. Ponni Sugars and Chemicals Ltd.....