TaxTMI 
TaxTMI 
2019 (6) TMI 1210
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....as the 'Act'), dated 30.03.2015. 2. However, in this appeal, the assessee has raised multiple grounds of appeal but at the time of hearing the main grievance of the assessee is confined to ground nos. 3 to 5 which relates to treatment of the subsidy received under technical upgradation fund scheme (TUF scheme). Whether TUF subsidy is capital in nature or revenue in nature. 3. Grounds nos. 1, 2 and 6 raised by the assessee are not pressed therefore these grounds are dismissed as not pressed. 4. Brief facts qua the issue are that the issue relating to subsidy received under TUF scheme has not been discussed by the Assessing Officer in his assessment order. However, the assessee has raised this issue during the appellate proceedings b....
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....e Hon'ble High Court has referred to decision of Honble Supreme Court reported in 229 ITR 383 and has held that such grounds are admissible during appeal. Regarding treatment of TUF subsidy as a capital receipt. Ld. AR has relied on the decision of - "Hon'ble Calcutta High Court in CIT(A}-4, Kolkata vs. M/ s. Golster Jute Mill- Ltd. (ITAT No. 200 of 2014), G.A. No. 3980 of 2014 & G.A. No. 3981 of 2014 dt. 18.06.2018) has held such sum as capital receipt only. We have already submitted in our written submission earlier a number of judgment and had also enclosed copy of order of ITAT of Kolkata Bench judgment in Gloster Jute Mills Ltd. which has now been affirmed by Hon'ble Calcutta High Court, hence the aforesaid sum may....
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....n of explanation 10 to section 43(1). Therefore they don't help the case of the assessee. Hence, by virtue of provision of sec. 43(1) r.w. Explanation 10 of the Act, said subsidy should be reduced from the cost of asset or plant and machineries. Assessing Officer is directed to take appropriate action in this respect." 5. The ld. DR has vehemently opposed the submission of the ld. Counsel stating that the subsidy received by the assessee under TUF scheme is for helping nature to run the business and to meet the day to day expenses therefore the subsidy should be treated as revenue in nature. However, the ld. Counsel for the assessee, per contra submitted that this is a fund / subsidy received by the Government to upgrade overall technolo....
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....ereby the order dt. 02-04-2014 supra is binding on the appellant Revenue. We further find that the Coordinate Bench of this Tribunal in assessee's case in ITA Nos. 1989 & 1010/Kol/2013 for the A.Ys 2008-09 & 2009-10 vide its order dt. 14- 08-2015 followed the decision of the Hon'ble High Court of Calcutta and dismissed the appeal of revenue. We also find that the CIT-A followed the decision of the Hon'ble High Court of Calcutta in the case of CIT Vs. Rasoi Limited in GA No. 2684 of 2014/ITAT No. 138 of 2014 dt. 05-09-2014 for the year under consideration and deleted the addition made by the AO in this year also, copy of the same is on record. For the sake of convenience the relevant portion of order dt. 02-04-2014 is reproduced herein below....
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....he financial aid, is not a payment, directly or indirectly, to meet any portion of the actual cost. Therefore, the said amount of subsidy cannot be deducted from the actual cost under sec. 43(1) for the purpose allowing depreciation. It is further held that if Government subsidy is an incentive not for the specific purpose of meeting a portion of the cost of the assets, though quantified as a percentage of such cost, it does not partake the character of payment intended either directly or indirectly to meet the "actual cost". By implementation, the above judgment also provides that if the subsidy is intended for meeting a portion of the cost of the assets, then such subsidy should be deducted from the actual cost, for the purpose of computi....
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....sary to show that the subsidy was directly or indirectly used for acquiring an asset. This is a question of fact. The relatable subsidy to such asset can be reduced from the cost only if it is found that the cost for acquiring that asset was directly or indirectly met out of the subsidy. Likewise in the proviso, it is necessary to show that the subsidy has been directly or indirectly used to acquire an asset but it is not possible to exactly quantify the amount directly or indirectly used for acquiring the asset. Here also, a finding of fact is necessary that an asset was acquired by directly or indirectly using the subsidy. The above Explanation and the proviso thereto do not dilute the finding of the Hon'ble Supreme Court in the case of P....