2024 (5) TMI 1245

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....ive to be a capital receipt is perverse or not?" Facts 3. Briefly stated, facts of the present case are that the Government of West Bengal brought "West Bengal Incentive Scheme, 2000" for promoting industrialisation in backward areas and to allure entrepreneurs to set up large, medium, cottage and small scale projects. The main aim and purpose of the Scheme was "promotion of industries in the State of West Bengal" and for that purpose, it provided incentives. 4. Allured with the Scheme, the respondent herein intended to set up an edible oil refinery plant and a captive power generation plant at Budge Budge, South 24 Parganas. The Government of West Bengal, Department of Commerce and Industries vide letter No. 1219/JS/DC dated 22.03.200....

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....amount @ 75% of the tax paid by the unit on its sales in the previous year as IPA. This benefit could be claimed and was claimed by the respondent only after the total investment crossed the limit of Rs.25 crore and on starting commercial production. Thus, as per the Scheme, the IPA was provided as incentive for setting up new unit or expansion of existing unit, though the mode of calculation of assistance was sales tax paid by the respondent company. During the assessment years in question i.e. 2009-10, 2010-11 and 2011-12, the respondent assessee received subsidy as under: Serial No. Assessment Year Amount of Subsidy 1. 2009-10 Rs. 6,19,47,252/- 2. 2010-11 Rs. 7,33,92,730/- 3. 2011-12 Rs. 7,55,60,000/- 5. The aforesaid subsid....

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....sion, learned counsel for the respondent has relied upon a judgment of this Court in Principal Commissioner of Income Tax v. Budge Budge Refineries Limited, [2002] 139 taxmann.com 124 (Calcutta) which relates to the same Scheme and the respondent assessee. Discussion & Finding 8. We have carefully considered the submissions of learned counsel for the parties and perused the record of the appeal. We have already noted the facts of this case, which leaves no manner of doubt that the scheme under which the subsidy was received was for promotion of industrialization in the state of West Bengal. In the respondent assessee's own case for the assessment years 2007-08 and 2008-09, the controversy as to whether the subsidy received is a capital r....