2018 (2) TMI 2024

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....R PER PRASHANT MAHARISHI, A. M. 1. This is an appeal filed by the revenue against the order of the ld IT(A)-4, New Delhi dated 22.02.2016 for the Assessment Year 2012-13. 2. The revenue has raised the following grounds of appeal:- "1. On the facts and circumstances of the case and in law the ld CIT(A) has erred in deleting the disallowance made on account of sale of tax subsidy o....

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....d held that this subsidy is revenue in nature. The ld Assessing Officer relied upon the decision of the Hon'ble Supreme Court in case of Sahaney Steel and Presswork Ltd Vs. CIT 228 ITR 253. The ld AO was also of the view that since assessment year 2008-09 the assessee itself was treating it as revenue receipt and offering the same for taxation and this is the first year where it is claiming to....

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....hemently contested the order of the ld CIT(A) and supported the order of the ld AO. He submitted that VAT refund is a revenue receipt and the interest on term loan subsidy is revenue in nature. He further referred to the amendment to the definition of income u/s 2(24) of the Income Tax Act wherein, such receipts are income. It was further submitted that assessee also has not adjusted the above sum....

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....sidy i.e. "purpose test" needs to be looked into. Hon'ble Supreme Court further stated that source of the subsidy, time of the subsidy is not relevant. According to the Hon'ble Supreme Court if the object of the subsidy scheme was to enable the assessee to run the business more profitably then the receipt was on revenue account. It was further held that if the object of the subsidy was to ....