TaxTMI 
TaxTMI 
2020 (10) TMI 131
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....he consent of both the parties A.Y.2012-13 is taken as a lead case and the decision rendered thereon would apply with equal force for A.Yrs. 2013-14 and 2014-15 also except with variance in figures. The only effective issue on merits to be decided is as to whether the subsidy received by the assessee is chargeable to tax in the facts and circumstances of the case. 3. We have heard rival submissions and perused the materials available on record. We find that assessee company is engaged in the business of manufacturing and trading in yarns, fabrics and textiles. The return of income for the A.Y.2012-13 was filed by the assessee on 27/09/2012 declaring total income of Rs. 19.88 Crores and assessment was completed u/s.143(3) of the Act on 10/03/2015 determining total income at Rs. 20.47 Crores wherein certain disallowances / additions made in the assessment. We find that assessee had received subsidies in various schemes of Central and State Governments as under:- (a) 2.5% interest subsidy under the Rajasthan Government Promotion Scheme 2003 of Rajasthan in favour of company‟s Bhilwara Unit. During the year, the assessee received Rajasthan State Government subsidy of Rs. 9.17 ....
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....had erroneously offered a particular receipt (which is not taxable) due to his ignorance or for some other reason and the same could not be revised by the assessee by way of filing revised return of income, but had raised the said claim before the appellate authority, the appellate authority is bound to look into the same and adjudicate the same. The Hon‟ble Jurisdictional High Court also held that assessee cannot be burdened with the tax which he is otherwise not entitled to pay as per law. Considering these statements, we find that the ld. CIT(A) had admitted the additional ground filed by the assessee and the ld. CIT(A) had adjudicated the non-taxability of the receipt of subsidy after due examination of the relevant scheme which are available in the public domain. We find that the ld. CIT(A) had duly mentioned with regard to subsidy received of TUF of Rs. 20.15 Crores as under:- 1. Subsidy received under TUFS of Rs. 20.15crores: "(a) The objective of subsidy by the Government under TUFS was to meet the challenges of post quota regime which requires industry to become more competitive, cost effective and quality oriented. With this background, Govt. of India launched a....
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....radation so that they could compete with global textile industries and contribute to the Indian economy (f) The interest charged in respect of 'SBI Rupee Term Loan and other banks of appellants' for meeting the objectives of TUFS was given as incentive to the Appellant. According the said incentives was granted to encourage additional investment for expansion and modernization of the industrial undertaking, the same is in the nature of a capital receipt and is, not chargeable to tax under the provisions of Income Tax Act, 1961 (Act]. 3.2. We find that the ld. CIT(A) with regard to non-taxability of incentive of Rs. 9.17 Crores received under Rajasthan Investment Promotion Policy 2013 of Rajasthan Government as under:- a) The nature of Incentive subsidy under the Rajasthan Investment Promotion Policy 2003 as one to encourage creation of new capacity by way . of setting up or expansion of industries in the backward areas of the state. b) Interest/Wages subsidy under the Rajasthan Investment Promotion Po1icy 2003 was received for industries to be set up in group B and group C areas and not to industries in group A area which means subsidy is basically granted for promot....
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....uld not be denied and there is no estoppel against the statute. 3.4. We find that the ld. CIT(A) had duly examined the subsidy scheme of the Central and State Government and had reproduced the contents there on in his appellate order. From the perusal of the same, we find that the purpose of granting subsidy to the assessee in the instant case is for setting up of the industry in particular location. Hence, the "purpose test‟ as contemplated by the Hon‟ble Supreme Court in the case of Ponni Sugars & Chemicals Ltd. vs. CIT reported in 306 ITR 392 is fully satisfied by the assessee in the instant case and accordingly, the subsidies granted thereon had been rightly considered as capital receipts by the ld. CIT(A). We find that since this issue is a legal issue, the ld. CIT(A) had rightly admitted the additional ground of appeal raised before him and had adjudicated the same in detail. This is not the case of ld. CIT(A) merely accepting to the statements of the assessee without recording his independent findings in the appellate order. 3.5. On the contrary, we find that the ld. CIT(A) having co-terminus powers with that of the Assessing Officer had duly examined the enti....
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.... that are due from the assessee. Reliance in this regard is placed on the decision of the Hon‟ble Gujarat High Court in the case of Gujarat Gas Co. Ltd vs. JCIT reported in 245 ITR 84. We also find that in yet another decision, the Hon‟ble Gujarat High Court in the case of CIT vs. Milton Laminates Ltd., reported in 218 Taxman 108(Guj) after considering the decision of the Hon‟ble Supreme Court in the case of CIT vs. Shelly Products reported in 261 ITR 367 had held that assessed income could be below the returned income by observing as under:- "7. In view of the above, we do not find any reason to interfere with the Tribunal's ultimate conclusion in allowing the assessee's appeal. Though some of the observations may not appeal to us, nevertheless, for the reasons somewhat different from those recorded by the Tribunal we come to the same conclusion. Decision of the Apex Court in case of Shelly Products & others(supra), was rendered in very different background. It was a case where the assessee had filed return. Assessee had paid self assessment tax on the income disclosed in the return. Tribunal on appeal by the assessee held that the order of assessment p....