TaxTMI 
TaxTMI 
2024 (3) TMI 658
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....iled by the assessee was selected for scrutiny and statutory notices under section 143(2) as well as section 142(1) were issued and served on the assessee. The Assessing Officer ("AO") vide order dated 28/12/2017 passed under section 143(3) of the Act assessed the total income of the assessee at Rs. 1973,66,56,516, under normal provisions of the Act, after making certain additions/disallowances. The learned CIT(A), vide impugned order, granted partial relief to the assessee. Being aggrieved, both the assessee as well as the Revenue are in appeal before us. ITA No.1673/Mum./2019 Assessee's Appeal - A.Y. 2015-16 3. In its appeal, the assessee has raised the following grounds:- "1. The Learned Commissioner of Income tax (Appeals) - 01, Mumbai, erred in applying rule 8D and confirming disallowance to the tune of Rs. 167.23 lacs. 2. The Learned Commissioner of Income tax (Appeals) - 01, Mumbai, erred in disallowing Rs. 54.06 Lacs being expenditure incurred for evaluation of various business opportunities considering it as capital in nature. 3. The Learned Commissioner of Income tax (Appeals) - 01, Mumbai, erred in disallowing Rs. 72.69 lacs being Prior period expenditure claime....
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....and, the learned Departmental Representative ("learned DR") vehemently relied upon the order passed by the AO. 8. We have considered the submissions of both sides and perused the material available on record. Undisputedly, in the present case, the assessee earned a dividend income of Rs. 68.85 crore from domestic companies/mutual funds and also earned interest on tax-free bonds amounting to Rs. 1.79 crore, which has been claimed as exempt under section 10 of the Act. Further, there is also no dispute regarding the fact that the assessee while computing its taxable income suo-moto disallowed an amount of Rs. 23,96,476 as an expenditure incurred for earning the aforesaid exempt income. As per the assessee, the aforesaid suo-moto disallowance is based on the report obtained from the accountant, who after verifying assessee's books of accounts and relevant records has estimated the amount of disallowance. The working of aforesaid suo-moto disallowance made by the assessee, forms part of the paper book on page 331, as under: "Classe 21(h) Amount of deduction inadmisible in terms of section 14A in respect of the expenditure incurred in relation to income which does not form part of ....
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....t income. Accordingly, the AO proceeded to compute the disallowance of Rs. 1,51,24,084/- under section 14A read with Rule 8D of the Rules, after considering the suo-moto disallowance made by the assessee. 10. Before proceeding further, it is pertinent to note certain relevant provisions of the Act, which are necessary for adjudication of the issue at hand. Section 10 of the Act deals with income which does not form part of the total income of the assessee. Section 14A of the Act provides that no deduction shall be allowed in respect of expenditure incurred by the assessee in relation to income which does not form part of the total income under this Act. Further, section 14A(2) of the Act, reads as under: "(2) The Assessing Officer shall determine the amount of expenditure incurred in relation to such income which does not form part of total income under this Act in accordance with such method as may be prescribed, if the Assessing Officer, having regard to the accounts of the assessee, is not satisfied with the correctness of the claim of the assessee in respect of such expenditure in relation to income which does in form part of the total income under this Act". (emphasis supp....
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....ecome applicable." (emphasis supplied) 12. Therefore, the satisfaction as required to be recorded under the provisions of section 14A of the Act is not limited to merely disagreeing with the submission of the assessee and requires that the AO should also provide the basis for reaching such a conclusion, after having regard to the accounts of the assessee. However, as noted above, in the present case the AO merely proceeded to compute the disallowance under section 14A read with Rule 8D without examining the correctness of the claim of the assessee regarding expenditure incurred for earning the exempt income. It is evident from the record that the assessee's own funds, i.e. share capital and reserves & surplus, are Rs. 2487.78 crore, while investment in tax-free securities is only limited to Rs. 165.07 crore and therefore it can be presumed that the assessee had sufficient own funds for making the aforesaid investment in tax-free securities. Further, it is also evident from the record that the assessee has computed the suo-moto disallowance on the basis of the salary cost of the designated employees, however, there is no material available on record to show that the AO has rec....
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.... satisfaction with regard to the correctness of the claim of the assessee. It is only thereafter that the provisions of section 14A (2) and (3) read with rule 8D of the Rules or a best judgment determination, as earlier prevailing, would become applicable." Thus, Rule 8D of the Rules cannot be invoked where the suo moto disallowance made by the respondent assessee is not found to be satisfactory by the Assessing Officer having regard to the accounts of the assessee. In the absence of recording the aforesaid fact of non- satisfaction in terms of Section 14A(2) of the Act, invocation of Rule 8D is not permissible. (e) Therefore, in view of the above decision of the Apex Court, this question also does not give rise to any substantial question of law. Thus, not entertained." 14. Since, in the present case, no proper satisfaction has been recorded by the AO in terms of the provisions of section 14A(2) of the Act, having regard to the accounts of the assessee, about the correctness of the claim of the assessee in respect of expenditure incurred in relation to exempt income, respectfully following the aforesaid decisions, we do not find any reason for upholding the disallowance made....
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....rned CIT(A), vide impugned order, dismissed the ground raised by the assessee on this issue by following the approach adopted by its predecessor in assessee's own case for the assessment years 2012-13 and 2014-15. Being aggrieved, the assessee is in appeal before us. 15. Having considered the submissions of both sides and perused the material available on record, we find while considering a similar issue, the coordinate bench of the Tribunal in assessee's own case in Asian Paints Ltd v/s ACIT, in ITA No. 269/Mum./2018, for the assessment year 2014-15, vide order dated 06/03/2024, after examining the engagement letters entered between the assessee and the consultants held that the entire expenditure incurred by the assessee cannot be disallowed and the disallowance should be restricted to the expenditure which has been incurred for evaluation of business opportunities that cannot be said to be in line with the existing business or an extension of the existing business of the assessee of manufacturing of paints and enamels. The relevant findings of the coordinate bench, in the aforesaid decision, are as under:- "15. We have considered the submissions of both sides and perused the ....
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....s or an extension of the existing business conducted by the assessee, it is pertinent to note that the assessee has claimed itself to be the largest manufacturer of paints and enamels in India and a market leader in the Indian paint industry. Further, from the perusal of the annual report of the assessee as well as submissions filed before the AO, we find that home improvement and decor were considered as one such area which offers tremendous growth opportunities by the assessee. Accordingly, the assessee amended its object clause in the Memorandum and Articles of Association on 17/12/2012. Further, it is also evident from the aforesaid documents that in January 2013, the assessee's board granted in-principle approval to enter into an arrangement with the promoters of the Sleek Group for acquiring a 51% stake in the Sleek Group, which is engaged in manufacturing, selling, and distribution of modular kitchens as well as kitchen components including wire baskets, cabinets, appliances, accessories, etc., with a pan-India presence. Thus, from the perusal of the documents available on record, it is sufficiently evident that the assessee ventured into altogether a new line of business, w....
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.... the overall home improvement business. From the description of the furniture and furnishing, as provided in the aforesaid engagement letter, we find that the same includes beds, cupboards, sofas and seatings, tables, kids' furniture, wall shelves, furniture upholstery, and curtains. From the perusal of the description of the furniture and furnishings, in respect of which the assessee explored business opportunity with the help of the consultant, we are of the considered view that same constitutes a completely new line of business and the same is not an extension of the existing business of manufacturing of paints and enamels by the assessee. Accordingly, the expenditure incurred on exploring business opportunities in furniture and furnishings is held to be capital in nature. 18. Similarly, from the summary of expenditure incurred by the assessee on exploring various business opportunities, we find that the assessee also incurred expenditure on exploring business opportunities in bathroom space, which includes tiles, sanitary ware, bath fittings, and accessories like sliding glass partitions, glass doors, shower stalls, etc. In view of our aforesaid findings, the same cannot ....
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....apital. Therefore, from the documents available on record, it is evident that the impugned expenditure was incurred towards the process of acquisition of majority shareholding in Kadisco Chemical Industry PLC., Ethiopia, which is a capital transaction. In any case, the expenditure cannot be said to be in line with the existing business of the assessee of manufacturing paints and enamels or an extension of the existing line of business of the assessee, as the expenditure was incurred on pre-acquisition due diligence of the company which cannot be equated with market survey or preparing feasibility report for extension of the business. Accordingly, this expenditure is held to be capital in nature. 21. In view of our aforesaid findings, we are of the considered view that the entire expenditure of Rs. 8.60 crore incurred by the assessee cannot be disallowed and the disallowance should be restricted to the expenditure which has been held to be capital in nature. Further, the other expenditures in the summary, which are in relation to the expenditures found to be capital in nature are also to be disallowed. We order accordingly. As a result, ground no.2 raised in assessee's appeal is p....
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....not agree with the submissions of the assessee and after perusing the breakup of prior period expenses noted that prior period expenses claimed by the assessee are on account of rectification of mistakes of earlier years. The AO further held that only such expenses which have been crystalised during the current year because of events not in the control of the assessee can be allowed as a deduction and no deduction of prior period expenses can be allowed in the computation of income of the assessee because the assessee did not make adequate efforts to reconcile the accounts in proper time. The learned CIT(A), vide impugned order, dismissed the ground raised by the assessee on this issue and held that in the year under consideration the assessee has claimed prior period expenses, which has resulted from the rectification of accounts of earlier years, and debited the same to the Profit and Loss account despite the fact that such expenses were not crystallised or become payable in the year under consideration. 19. Undisputedly, the assessee is following the mercantile system of accounting, and therefore only such expenses which are crystallised during the year can be allowed as a dedu....
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....t adjusted with the provision amount. The AO further held that as per section 36(1)(vii) of the Act, the amount should be written off in the accounts of the assessee as irrecoverable, however, the assessee has only made the provisions. Accordingly, the claim of provision for doubtful debts of Rs. 1,59,37,355 was disallowed and added to the total income of the assessee. 22. The learned CIT(A), vide impugned order, dismissed the ground raised by the assessee on this issue and held that for the provisions of section 36(1)(vii) to be applicable, it is essential that the amount of any bad debt or part thereof is written off as irrecoverable in the accounts of the assessee for the previous year in question. However, in the case of the assessee, it is seen that it has only created an account for "provision for doubtful trade receivables" on an estimated basis and has reduced such provision from the "sundry debtors" but such provisions created for doubtful trade receivables have not been obliterated as the same has been shown by the assessee in the balance sheet on the assets side as "provision for doubtful trade receivables". Thus, it was held that the provisions so created have neither ....
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..... 24. The issue arising in ground no.5, raised in assessee's appeal, pertains to the disallowance of expenditure incurred by the assessee on "Colour Idea Stores" by treating the same as capital expenditure. 25. The brief facts of the case pertaining to this issue, as emanating from the record, are: During the assessment proceedings, upon perusal of the details furnished by the assessee, it was observed that the assessee has incurred an amount of Rs. 32,44,46,533 towards "Colour Idea Stores" and debited this expense in the Profit and Loss account under the head "Advertisement and Sales Promotion Expenses". Accordingly, the assessee was asked to justify the allowability of the expense as revenue expenditure. In response thereto, the assessee submitted that every year it incurs various expenditures on advertisement on sales promotion expenses. It was further submitted that in order to enhance the dealer network and to provide premium service to customers the concept of "Colour Idea Stores" has been introduced and the expenses represent the expenses relating to setting up of "Colour Idea Stores", transition cost, store upgradation cost, etc. The assessee submitted that "Colour Idea S....
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....such intangible has to be treated as capital in nature. Being aggrieved, the assessee is in appeal before us. 28. We have considered the submissions of both sides and perused the material available on record. During the year under consideration, the assessee claimed expenditure incurred on "Colour Idea Stores" under the head advertisement on sales promotion expenses. In its annual report, the assessee has declared that during the financial year 2014-15, the count of "Colour Idea Stores" has increased to more than 200 with the record installation of 70 new stores. It is further stated that in-store colour consultancy is a key feature of these stores, which benefited more than 1,25,000 customers across these "Colour Idea Stores" during the year. As per the assessee, in order to promote its brand and products through a network of retail outlets, wherein the customers can have a complete experience of assessee's paints and colour and can also understand various products, and their attributes, educate themselves through colour consultants and other literature on paints, the assessee has entered into an agreement with certain dealers, whereby the dealers provide designated space in the ....
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....signated Shop Area unless specified by the assessee. Further, it was agreed that the dealer shall not be entitled to any special privileges, prerogatives, benefits, discounts, or rebates as compared to other dealers by virtue of this agreement nor the dealer shall charge in excess of the MRP declared by the assessee for the facilities provided to the customers and the Designated Story Area. At the outset, we are of the considered view that none of the clauses of the agreement lead to the conclusion that any fixed asset of enduring nature is created by incurring the aforesaid expenditure on "Colour Idea Stores". 30. The assessee is in the business of manufacturing paints and enamels and therefore in order to promote its brands and products, through a network of retail outlets, wherein the customers can have a complete experience of assessee's products, apart from having the literature and pamphlets pertaining to its various types of products which include wall finishes for interior and exterior use, enamels, wood finishes and ancillary products such as primers, putties, etc., the assessee set up "Colour Idea Stores" at the shops of its dealers. It is pertinent to note that for any ....
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....these applications are dismissed as not pressed. 32. In the result, the appeal by the assessee is partly allowed for statistical purposes. ITA No.2959/Mum./2019 Revenue's Appeal - A.Y. 2015-16 33. In its appeal, the Revenue has raised the following grounds:- 1. Whether, on the facts and in the circumstances of R the case and in law, the Ld. CIT(A) was right in directing the A.O. to verify the allowability of expenditure incurred u/s 35(2AB) without appreciating the fact that the expenditure was disallowed by DSIR (as per Certificate in Form No. 3CL) as the same was not incurred for R & D purpose? 2. Whether, on the facts and in the circumstances R of the case and in law, the ld. CIT (A) was right in restricting the disallowance u/s 144 r.w. Rule 8D to Rs. 1,67,23,000/-, without appreciating the facts of the case? 3. Whether, on the facts and in the circumstances of the case and in law, the ld. CIT (A) was right in allowing Rs. 286.47 lacs on account of balance 10% additional depreciation on additions made in A.Y. 2014-15, without appreciating the facts of the case? 4. Whether, on the facts and in the circumstances of the case and in law, the ld. CIT(A) was right in al....
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....ertificate of expenditure in Form No.3CL received from the DSIR. The assessee also provided a copy of the reconciliation between the amounts claimed in the return of income vis-a-vis the claim allowed by the DSIR. During the assessment proceedings, the assessee was also asked to show cause why the differential amount as per Form No.3CL be not disallowed, which was not allowed by the DSIR. In response thereto, the assessee submitted that except for the expenditure in the nature of land and building, all other expenditures incurred on scientific research will be eligible for the weighted deduction under section 35(2AB) of the Act. The assessee further submitted that all the expenditures incurred by it are eligible for weighted deduction since they are incurred in the approved R&D facility. 36. The AO vide order passed under section 143(3) of the Act did not agree with the submissions of the assessee and restricted the weighted deduction on R&D expenditure under section 35(2AB) of the Act on the basis of the certificate issued by the DSIR in Form No.3CL. 37. The learned CIT(A), vide impugned order, following the decision of the coordinate bench of the Tribunal rendered in assessee's....
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....e entire expenditure incurred by the assessee in that case on R & D was duly certified by the prescribed authority whereas in the case of the assessee, the same is not certified to be eligible R & D expenditure to the extent of Rs. 54.34 lakhs. 14. The le Counsel for the assessee has also relied on the decision of the Ahmedabad bench of ITAT in the case of ACIT vs Torrent Pharmaceuticals Ltd. in ITA No.3569/Ahd/2004 dated 13.11.2009 in support of the assessee's case on the issue under consideration. In the said case, weighted deduction claimed by the assessee u/s 35(2AB) on account of R & D expenditure was partly disallowed by the AO relying on the figure contained in the certificate issued by DSIR and the same was held to be unsustainable by the Tribunal holding that There was no justification in harping upon the figure contained in the certificate issued by DSIR as was done by the Assessing Officer. It was held by the Tribunai that the relevant provisions of the Act did not contain any specific condition that the deduction u/s 35(2AB) and accordingly the claim of the assessee for deduction u/s 35(2AB) will be restricted to the amount of R & D expenditure as contained in the....
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....aimed additional depreciation @10% on the fixed assets acquired during the financial year 2013-14 amounting to Rs. 2,86,47,976 under section 32(1)(iia) of the Act. Accordingly, the assessee was asked to explain the allowability of additional depreciation so claimed. In response thereto, the assessee submitted that as per section 32(1)(iia) of the Act, the assessee is entitled to claim 20% additional depreciation on any new plant and machinery acquired after 31/03/2005. It was further submitted that as per the provision to section 32(ii)(b), if the assets are put to use for less than 180 days in the previous year, then the deduction in respect of depreciation shall be restricted to 50%. Accordingly, the assessee could claim only 10% of the additional depreciation for additions made in the second half of the financial year 201314 and the balance 10% additional depreciation was claimed in the year under consideration. The AO vide assessment order did not agree with the submission of the assessee and accordingly, disallowed the additional depreciation of Rs. 2,86,47,976 claimed by the assessee in the year under consideration and added the same to the total income of the assessee. 43. ....
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.... assessee based on his own decision for assessment year 2008- 2009 in case of the assessee. We find that the identical issue has been decided in favour of the assessee in the assessee's own case for assessment year 2009-10 in ITA number 2754/M/2014 and ITA number 4203/M/2014 by coordinate bench as Under:- "38. In ground No. 5, revenue has challenged the decision of learned Commissioner (Appeals) in allowing assessee's claim of additional depreciation. 39. Briefly the facts are, in course of assessment proceedings, the Assessing Officer noticed that the assessee has claimed carried over amount of additional depreciation relating to the immediately preceding assessment year. Therefore, he called upon the assessee to justify the claim. However, the assessee furnished a detailed submission stating that the balance portion of additional depreciation, which could not be claimed in the preceding assessment year, has to be allowed in the impugned assessment year; however, the Assessing Officer was not convinced. Accordingly, he disallowed the additional depreciation claimed of Rs. 1,72,86,752/-. Assessee contested the disallowance before learned Commissioner (Appeals). Taking n....
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.... following the above decision in assessee's own case for the A.Y. 2010-11 and also following the principle of "Rule of consistency" we dismiss the ground raised by the revenue holding that Ld.CIT(A) is correct in allowing the additional depreciation at the rate of 10% for asset purchased in the earlier year. Ground raised by the revenue is dismissed." 45. We find that similar findings were rendered by the coordinate bench of the Tribunal in assessee's own case in the assessment years 2012-13, 201314 and 2014-15. We find that this issue is recurring in nature and has been decided in favour of the assessee in the preceding assessment years. The learned DR could not show us any reason to deviate from the aforesaid decision and no change in facts and law was alleged in the relevant assessment year. Thus, respectfully following the judicial precedents in assessee's own case cited supra, ground no.3 raised in Revenue's appeal is dismissed. 46. The issue arising in ground no. 4, raised in Revenue's appeal, pertains to the allowance of expenditure incurred on the Trip Scheme. 47. The brief facts of the case pertaining to this issue, as emanating from the record, are: During the asse....
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....y the facts are, during the assessment proceedings, the Assessing Officer noticed that the assessee had debited an of amount 16,10,45,094/- towards expenditure incurred on account of trip scheme. Noticing this, he called upon the assessee to justify the claim. After verifying the details furnished by the assessee, the Assessing Officer observed that the amount was paid to SOTC for foreign trip of its dealers. Being of the view that the expenditure incurred was not for the purpose of assessee's business, he held the same as not allowable. Further, he held that since the assessee has not deducted tax at source on the expenditure incurred, which is nothing but in the nature of commission paid to dealers and distributors, the same has to be disallowed under section 40(a)(ia) of the Act. Accordingly, he disallowed the deduction claimed by the assessee. Assessee contested the disallowance before the first appellate authority. considering After the submissions of the assessee in the context of facts and materials on record, learned Commissioner (Appeals) deleted the disallowance made by the Assessing Officer. 45. Strongly relying upon the observations of the Assessing Officer, the l....
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.... assessee through SOTC. Thus, from the aforesaid facts it is very much clear that the entire trip scheme is for the purpose of expanding assessee's business by encouraging the dealers and distributors to achieve a specific target of purchase. Thus, the scheme is closely linked to assessee's business activity. It is also a fact that the assessee has not paid any amount to the dealers and distributors, but amount spent has been paid to SOTC for organizing the trip. It is also a fact on record that the amounts paid to SOTC has been subjected to TDS as per the relevant provision. Therefore, the allegation of the Assessing Officer that the amount has not been subjected to deduction of tax is without any basis. As regards the applicability of section 194H of the Act, by no means, the Assessing Officer has established on record that dealers/distributors are agents of the assessee. Further, as we find, the trip scheme has been introduced by the assessee from past 20 years and the deduction claimed by the assessee on account of such trip scheme has never been disallowed by the Assessing Officer except for the impugned assessment year. Therefore, even applying the rule of consistency....
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....the Double Taxation Avoidance Agreement ("DTAA") entered with the aforesaid countries, the assessee is liable to pay tax only on the amount of Royalty received by it. The AO vide assessment order did not agree with the submissions of the assessee and by following the approach adopted in the assessment years 2011-12 to 2014-15 proceeded to make the addition of the balance Royalty, i.e. 2%, which was waived by the assessee. 53. The learned CIT(A), vide impugned order, held that a similar waiver was granted to the subsidiaries from the assessment year 2008-09 till 2010-11 and the AO/TPO has not made any addition with respect to the same. Following its decision rendered in assessee's own case for the assessment years 2011-12 and 2014-15, the learned CIT(A) allowed the ground raised by the assessee on this issue. Being aggrieved, the Revenue is in appeal before us. 54. Having considered the submissions of both sides and perused the material available on record, we find that while deciding a similar issue in favour of the assessee, the coordinate bench of the Tribunal in assessee's own case cited supra, for the assessment year 2012-13, observed as under:- "64. We have considered the ....
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....roceeding further, it is pertinent to note that as per section 5(1) of the Act in the case of a resident, the total income, inter-alia, includes all income from whatever sources derived which accrues or arises to him outside India during the year. As per the assessee, it is entitled to receive the Royalty from its overseas subsidiaries @3% on the net sales price of products sold by the overseas subsidiaries. Thus, the net sale price of the products sold can only be determined at the end of the financial year and accordingly, the amount of Royalty payable to the assessee can only be computed thereafter. Therefore, prior to the end of the financial year, no amount accrues or arises to the assessee outside India. In the present case, prior to the determination of the net sale price of the products sold, the assessee had decided to waive Royalty by 2%. No material has been brought on record to show that there is no understanding between the assessee and its overseas subsidiaries to waive the Royalty. Such being the facts, we are of the considered view when only 1% Royalty is payable by the overseas subsidiaries, therefore the AO has no authority to make an addition of the balance 2% Ro....
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...., restored this issue to the file of the AO by observing as under:- "71. We have considered the submissions of both sides and perused the material available on record. As per the assessee, it has changed its practice from the assessment year 2012-13, where sundry balances written off is claimed as deduction, and sundry balances written back is offered for tax in its return of income. The assessee submitted that the expenditure is normal business expenditure and allowable as deductible expenditure. However, from the perusal of the record, we find that neither there is an examination of the aforesaid claim of the assessee nor any details were furnished. Accordingly, we deem it appropriate to restore this issue to the file of the AO for de novo adjudication. The assessee is directed to file necessary details/documents in support of its claim of deduction of sundry balances written off. As a result, ground no.9 raised in Revenue's appeal is allowed for statistical purposes." 60. Since a similar issue has already been restored to the file of the AO in a similar factual matrix, therefore, we deem it appropriate to restore this issue to the file of the AO with similar directions as ren....
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....Scheme of Incentives, 2007 of the Government of Maharashtra, the coordinate bench of the Tribunal vide order dated 05/03/2024 passed in assessee's own case in ACIT v/s Asian Paints Ltd., in ITA No.841/Mum./2018, for the assessment year 2013-14 held that the subsidy received by the assessee is capital in nature as the incentives/subsidy granted was only to encourage the setting up of industries in the less developed areas of the State and the same was not for the purpose of running the business more profitably. The relevant findings of the coordinate bench, in the aforesaid decision, are as under:- "67. We have considered the submissions of both sides and perused the material available on record. From the perusal of the Package Scheme of Incentives, 2007, forming part of the paper book from pages 182-210, we find that in order to encourage the dispersal of industries to the less-developed areas of the State, Government gave package of incentives to new/expansion units set up in the developing region of the State. The object of the Scheme is to achieve higher and sustainable economic growth with the emphasis on balanced regional development and employment through greater public and....
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....w unit or for substantial expansion of the existing unit. If the object of the subsidy scheme is to enable the assessee to run the business more profitably then the receipt is on the revenue account. On the other hand, if the object of the assistance under the subsidy scheme was to enable the assessee to set up a new unit then the receipt of subsidy was on the capital account. 7. We do not find any justification for the Revenue questioning the concurrent findings of fact in the present case. The concurrent findings of fact do not raise any substantial question of law. There is no perversity in rendering such findings and the purpose of assistance given by the Government through SICOM. In such circumstances the Revenue should not have questioned the concurrent orders in the case of the present assessee. Once the undisputed facts point towards the object and that being to enable the assessee to set up a new unit then the matter is squarely covered by the judgments of the Division Bench of this court and equally that of the honourable Supreme Court. 8. We are afraid that if the Revenue persists with such stand and as has been turned down repeatedly, that would defeat the very obje....
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....cts of the case pertaining to this issue, as emanating from the record, are: During the year under consideration, the assessee credited a sum of Rs. 13 lakh in its Profit and Loss account as electricity grants receivable from the Government of Haryana but the same was not considered as taxable. During the assessment proceedings, the assessee was asked the reason for its non-taxability. In response thereto, the assessee submitted that the State Government of Haryana had come out with the Industrial Policy, 2005 which envisages grant of fiscal incentives to re-establish industry and dispersal of economic activities particularly in economically and socially backward regions of the State. It was submitted that assessee's plant in IMT Rohtak village, Haryana is entitled to financial assistance under the aforesaid Industrial Policy, 2005, and accordingly, the assessee credited a sum of Rs. 13 lakh towards the electricity grant receivable from the Government of Haryana under Mega Project in Backward Area of the State Government of Haryana. The assessee also submitted that the object of the subsidy/incentives/grant was to encourage the setting up of industries in the backward area. 68. Th....
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....y, relaxation in floor area regulation, rebate on registration and transfer of property charges, etc. We find that vide letter dated 20/07/2007, forming part of the paper book on page 257, the assessee was granted the following special package of incentives/concessions for setting up a project at Industrial Model Township, Rohtak for the manufacturing of paints:- "i) Financial assistance in the form of Interest Free Loan (IFL) on 50% of the tax paid on the sale of goods in the State of Haryana, under the Haryana Value Added Tax Act, 2003 for a period of 7 full financial years. The 7 full financial years of financial assistance stated above to begin with the financial year following the year of start of commercial production. IFL for each financial year would be repayable after a period of 5 years from the date of the respective IFL. In case of an unified GST regime roll-out befote the end of the 7 financial years, the above stated financial assistance should continue to be protected. ii) Full 100% exemption from LADT for a period of 8 full financial years, beginning with the financial year after the year of start of commercial production. iii) Full 100% exemption from electri....