AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2016 (7) TMI 1571
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....ircumstances of the case, ld. CIT(A) has erred in deleting the addition of Rs. 30,74,998/-made in the assessement on account of interest subsidy by considering it as capital receipt without appreciating the fact that the subsidy was granted towards reducing interest burden of the assessee and received after the commencement of business. 3. Brief facts of the case are that the assessee is a Public Limited Company engaged in manufacturing of Jute & jute allied products and generation of power. During the assessment proceedings the Assessing Officer noted that under the "Technology Upgradation Fund Scheme" in short TUFS, the assessee received subsidy from Central Government of Rs. 30,74,998/- on account of 'interest refund'. Though the asse....
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....in the case of CIT -vs.- Sh. Sham Lal Bansal in ITA No. 472 of 2010 and held that the subsidy received for modernising assessee's existing infrastructure is capital in nature. The relevant portion of which is reproduced as under: 9. We have carefully considered the submissions. We find considerable cogency in the submissions of the ld. Counsel of the assessee. We find that identical issue under the Technology Upgradat ion Fund Scheme (in short 'TUFS' ) of Ministry of Textiles was considered by the Hon'ble Punjab & Haryana High Court in ITA No. 472 of 2010 vide decision dated 17.01.2011. Hon'ble High Court has considered and held the issue as under: - "2. The assessee is engaged in manufacture and sale of woolen garments. It receive....
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....). 11. Reliance placed by the Revenue on the case of Sawhney Steels and Press Works Ltd. & others (supra), in our view, is not appropriate having regard to the aforesaid features of the scheme, which are not in dispute. Moreover, in the case of Sawhney Steels and Press Works Ltd. & others (supra), it was found as a fact that the subsidy was given to meet recurring expenditure and was not for acquiring a capital asset. Whereas in the instant case, admittedly, there is no provision in the scheme to grant subsidy to meet any recurring expenditure and neither such a case has been set up by the Department. The only objections of the Department are that the subsidy has been given after commencement of production and, secondly that it was for r....
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....sutilization of capital subsidy and to provide an incentive for repayment, the capital subsidy will be treated as a non interest bearing term loan by the Bank/Fis. The repayment schedule of the term loan however will be worked out excluding the subsidy amount and subsidy will be adjusted against the term loan account of the beneficiary after a lock in period of three years on a pro-rate basis in terms of release of capital subsidy. There is no apparent or real financial loss to a borrower since the countervailing concession is extended to the loan amount." 7. In view of above, the view taken in Sahney Steel & Press Works Ltd. & Ors., could not be applied in the present case, as in said case the subsidy was given for running the business.....
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....ial support for capital outlay for expansion and modernisation and by following order of Coordinate Bench, we dismiss the ground no-1 raised by the Revenue. 9. Ground no-2 raised by the Revenue reads as under :- That on the facts and in circumstances of the case, ld. CIT(A) has erred in allowing unabsorbed depreciation of Rs. 71,61,090/- and business of Rs. 48,83,095/- pertains to 100% EOU Unit (100% exemption u/s10B) against the taxable income of the assessee from other unit. 10. In this case, the assessee during the year under consideration had three different units of income as under:- Sl. No. Unit Profit before taxation (1) DTA Rs. 8,59,19,380/- (2) 100% EOU Rs. 1,20,44,185/- (Loss) (3) Power Pl....
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....le on record. As rightly pointed out by the Ld.AR that the issue on hand was covered by the order 02-07-2014 of 'B' BENCH, KOLKATA in I.T.A. No.: 766/Kol./ 2010 assessment year: 2005- 2006. We find that the CIT-A relied on the order dated 28.03.2008 of this Tribunal for assessment year 2004-05 and allowed allowed unabsorbed depreciation of Rs. 71,61,090/- and business of Rs. 48,83,095/- pertains to 100% EOU Unit. The relevant portion of which is reproduced as under: 17. We have heard the rival contentions and perused the materials available on record. We find that it is clear that identical issue has been decided in favour of the assessee by the Tribunal in earlier years. It is not the case that Hon'ble Jurisdictional High Court has reve....