2020 (11) TMI 141

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....have been filed by the Revenue under Section 260A of the Income Tax Act, 1961 (for short, the Act) challenging the common order dated 13.6.2019 made respectively in ITA.Nos.345 and 344/Chny/ 2019 on the file of the Income Tax Appellate Tribunal, Madras 'C' Bench (for brevity, the Tribunal) respectively for the assessment years 2015-16 and 2014-15. 3. The above appeals were admitted on 14.9.2020 on the following substantial questions of law : "i. Whether, on the facts and in the circumstances of the case, the Tribunal was right in granting relief to the assessee by treating the receipt in question viz. grants received from the Government of Tamil Nadu as interest free loans and allowing depreciation claimed against the assets acq....

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....return of income for the assessment year 2014-15 on 29.9.2014 declaring a total income of Rs. 2,87,28,520/-. The case was selected for scrutiny and after service of notices both under Section 143(2) and Section 142(1) of the Act, the assessment was completed by order dated 30.12.2016 wherein the Assessing Officer held that the amounts provided by the Government of Tamil Nadu to the assessee was in the nature of grant for execution of various projects and that it had to be excluded from the cost of the asset as per Explanation 10 to Section 43(1) of the Act. 6. For the assessment year 2015-16, the assessee filed their return of income declaring a total income of Rs. 7,49,68,680/-. Upon scrutiny, the assessment was completed by order dated....

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....d that the amount received by the assessee was a grant. 10. Thus, we have to decide as to whether the assistance extended by the Government of Tamil Nadu to the assessee was in the nature of a grant or a loan. 11. We need not labour much to find an answer to this question, as it is contained in the various Government Orders, which have been passed in this regard and which have been placed before us by the assessee. In G.O. Ms.No.581 dated 19.10.2005, the Government sanctioned financial assistance to the tune of Rs. 56.931 Crores for rehabilitation of tsunami damaged roads and bridges, ports and harbours. In this Government Order, there was a reference to two earlier Government Orders namely (i) G.O.Ms.No.379 Revenue Department dated 2....

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....e find the orders passed by the CIT(A) to be well reasoned orders wherein the Government of Tamil Nadu had taken note of the opinion given by the Advocate General of Tamil Nadu and it was found that there was no reason to ignore the opinion of the Advocate General of Tamil Nadu and accordingly, the assessee's appeals were allowed. 14. That apart, in G.O.Ms.No.22 dated 03.2.2016, there was a resolution passed by the Board of the assessee requesting the Government to treat the financial assistance as an interest free loan and the Government considered the same and issued orders that the financial assistance from the ADB for implementing various works to develop the infrastructural facility of the TEAP was treated as an interest free loan f....