TaxTMI 
TaxTMI 
2021 (1) TMI 154
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....nd keeping in view of the reasons given therein, which are supported by an affidavit filed by the Assessing Officer (DCIT, Circle-6(1), Kolkata, we are satisfied that there was a sufficient cause for the delay of 16 days on the part of the revenue in filing this appeal before this Tribunal. Even the Ld. Counsel has not raised any objection in this regard. The delay of 16 days on the part of the revenue in filing this appeal is accordingly condoned and this appeal of the revenue is being disposed off on merits. 3. The assessee in the present case is a company, which is engaged in the business of manufacturing of cement, jute goods etc. The return of income for the year under consideration was filed by it on 29-09-2008 declaring a total income of Rs. 5,35,36,36,781/-. In the said return, Industrial Promotion Allowance of Rs. 2,55,27,120/- received during the A.Y under consideration to one of its unit at Durgapur under West Bengal Investment Scheme, 2000 was offered to tax by the assessee company. During the assessment proceedings, the said amount however, was claimed to be exempt from tax on the ground that it constituted a capital receipt. It was submitted that the 2000 Scheme wa....
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.... 2008-09 to 2009-10 (ITA Nos. 971/Kol/2012 & Ors, dated 25-08-2017), similar claim of the assessee for exemption on account of Industrial Promotion Assistance was allowed by the Tribunal for the following reasons:- "4.3. We have heard the rival submissions and perused the materials available on record including the paper book containing the entire West Bengal Incentive Scheme 2000 and eligibility certificate issued by the competent authority approving the expansion of existing unit thereby approving the fact of assessee falling under the category of 'Mega Unit' under the said scheme. We find that Subsidy could be reduced from the cost only if it is found that the cost for acquiring the asset was directly or indirectly met out of the subsidy. In order to apply the proviso, it is necessary to show that the subsidy had been directly or indirectly used to acquire the asset though it may not be possible to exactly quantify the amount directly or indirectly used for acquiring the asset. For the purpose of applying the proviso, also it has to be found that the asset was acquired by directly or indirectly using the subsidy. It is apparent from the provisions of the 2000 Sc....
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....nsistent view, we hold that the CIT(A) has rightly treated the sales tax subsidy receipt as 'capital in nature'. 8. In respect to the issue of application of Explanation-10 to Sec. 43(1) of the Act we find from the facts of the case that the Rajasthan Govt. has framed a incentive scheme i.e R.S.T/C.S.T Exemptions Scheme 1998 for encouragement of setting up of industrial project or expansion of existing industrial projects. It is also a fact that the maximum limit of the subsidy was restricted with reference to the value of fixed capital investment in land, building, plant & machinery but no part of the subsidiary was specifically intended to subsidize the cost of the any fixed assets, therefore, it cannot be said that subsidy was to meet a portion of cost of asset. According to us, assessee has rightly not reduced the amount of subsidy received from the actual cost/WDV of the fixed assets while claiming depreciation. It is also a fact that revenue during scrutiny assessments of the assessee for AYs 2002-03 to 2006-07 added the subsidy amount as revenue receipt but Tribunal has considered the receipt as 'capital', accepting the contention of the assessee. Even Hon'b....
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....t bears to all the assets in respect of or with reference to which the subsidy or grant or reimbursement is so received, shall not be included in the actual cost of the asset to the assessee. In order to invoke Explanation 10, it is necessary to show that the subsidy was directly or indirectly used for acquiring an asset. This is again 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.J Chemicals Ltd (supra) that asset-wise subsidy alone can be reduced from the actual cost. The above explanation and the proviso therein to explain the law. They are not bringing any new law different from....