AI Drafter 
TaxTMI 
TaxTMI 
2019 (8) TMI 109
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.... No.2663/AHD/2014 for A.Y. 2010-11. 2.00. The revenue has proposed the following substantial questions of law for consideration of this Court :- "(a).Whether in the facts and circumstances of the case, the learned ITAT has erred in law and on facts in upholding the deletion of addition on account of disallowance of expenses on consumption and replacement of stores and spares of Rs. 1,96,48,785/- treating the same as revenue expenditure instead of capital expenditure? (b). Whether in the facts and circumstances of the case, the learned ITAT has erred in law and on facts in in deleting addition on account of loss on sale of fertilizer bonds of Rs. 14,00,30,377/- treating it as business loss instead of capital loss? ....
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....rs and chemical plants complex wherein fertilizers like Urea and Ammonium Nitrophosphate and chemicals like Ammonia, Formic Acid, Acetic Acid, Weak Nitric Acid, Concentrated Nitric Acid and Methanol were manufactured. Various plants and equipment were in continuous operation in corrosive and acidic atmosphere. It was found that no new assets were created in the process of replacement of worn out parts. There was no capacity addition. The replacement of components of old machinery was made to bring to its original state of efficiency so that the entire integrated manufacturing unit which was considered as a profit making apparatus functions efficiently to its capacity and produces quality products. The CIT (Appeals) after perusing the paper ....
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....s well as affirmed by the Tribunal, it is clear that question (a) raised by the revenue is a pure question of fact and in the absence of any perversity being pointed out in the concurrent findings of fact recorded by the Tribunal, does not give rise to any question of law." 4.00. So far as the second and third questions are concerned, they are with respect to the deletion of loss on sale of fertilizer bond. This Court while answering the same in Tax Appeal No.1360 of 2018 held as under :- "8. It emerges from records that on the date of allotment the bonds were received in lieu of subsidy which was the additional sale price receivable from GOI. The assessee had offered to tax the subsidy receivable as part of sale price. The real....
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....ordingly, the loss on actual sale of the bonds cannot be considered as capital loss but the same was required to be allowed as business loss. 10. The Tribunal followed its earlier decision in ITA No.339/Ahd/2012 for assessment year 2008-09 in the case of Gujarat State Fertilizer and Chemicals Ltd. wherein similar issue had arisen. Being aggrieved by the same, the revenue preferred Tax Appeal No.900 of 2018 and this court by order dated 31.7.2018 dismissed the appeal by holding that the fertilizer bonds were issued by the Central Government in lieu of the subsidy. It is not disputed that the subsidy income cannot be said to be a business income. Therefore, in the facts of the case, the fertilizer bonds which were given by the Centra....
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.... Act does not arise. The relevant extract of section 194H reads as under:- "194. Any person, not being an individual or a Hindu undivided family, who is responsible for paying, on or after the 1st day of June, 2001, to a resident, any income by way of commission (not being insurance commission referred to in section 194D) or brokerage, shall, at the time of credit of such income to the account of the payee or at the time of payment of such income in cash or by the issue of a cheque or draft or by any other mode, whichever is earlier, deduct income-tax thereon at the rate of five per cent: Provided that no deduction shall be made under this section in a case where the amount of such income or, as the case may be, the aggreg....