TaxTMI 
TaxTMI 
2025 (6) TMI 573
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....No. 96/Del/2024 for A.Y. 2016-17 are against order dated 15.05.2024 (DIN & Order No. ITBA/NFAC/S/250/2024- 25/1064909200(1) passed by the Ld. CIT(A)/NFAC, Delhi, arising out of assessment dated 26.12.2018 (Order No. ITBA/AST/S/143(3)/2018- 19/1014577646(1) passed by the ACIT, Circle 19(2), Delhi under Section 143(1) of the Act. Since some common issues are involved for adjudication, all these matters were heard together and are being disposed of by this common order for the sake of convenience. ITA No. 2581/Del/2024 (Revenue's appeal for A.Y. 2015-16): 2 The appeal filed by revenue assessee is time barred by 8 days. The learned DR during the course of hearing has made request for condonation of delay and learned AR has not seriously disputed the delay aspect. Thus delay of 8 days in filing the instant appeal by the revenue is condoned. 3. The Revenue has raised following grounds of appeal: 1. Whether on the facts and in the circumstances of the case, the Ld.CIT(A) was right in allowing the claim of the assessee in treating the share issue expenses as revenue in nature, which is in contravention to the provisions of Section 35D of the Act, relying on the decision o....
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....ubmissions before the Ld. CIT(A): "1.1 During the A.Y. 2013-14, the appellant raised Rs. 601.28 crores by issue of share capital to the public through Initial Public offer (IPO). In connection with the issue, the appellant incurred expenditure aggregating to Rs. 38 crores. 1.2 Out of the total proceeds of Rs. 601.28 crores, the appellant incurred Rs. 41.02 crores on setting up of new showrooms Rs. 475.83 crores for the procurement of Inventory Rs. 46.43 crores for General corporate purposes and balance Rs. 38 crores for the share issue expenses. 1.3 From the perusal of the above it can be seen that the appellant has utilized 92% of the receipts on account of public issue on working capital and balance 8% was spent on capital expenditure. 1.4 The appellant claimed Rs. 60.80 lacs [1/5th of Rs. 3.04 crores (being 8% of the share issue expenses i.e. 38 crores)]to be allowed as deduction in each of the five successive previous years (commencing from A.Y. 2013-14) u/s 35D of the Act as an additional ground before Hon'ble ITAT. Hon'ble ITAT in the appellant's own case has allowed the aforesaid claim of the appellant vide order dated 07-12-20....
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.... so as to not warrant any interference. This ground of appeal as raised by the Revenue therefore fails. This ground of appeal is applied mutatis mutandis in Assessment Year 2016-17 having regard to the identical facts and circumstances of the matter. 8. The revenue has raised objections in regard to admission of appeal filed by assessee before the Ld. CIT(A) as the same is found to be barred by limitation. In this particular case the appeal is barred by limitation for about 1537 days in support of which the assessee explained as follows before the Ld. CIT(A): "1.1 The appellant is a public limited company inter-alia engaged in the business of manufacturing and trading of jewellery. The appellant filed its return of income on 30-11-2015, declaring total income of Rs. 4,22,28,69,410/- under the normal provisions of the Income Tax Act, 1961 ("the Act") and book profits of Rs. 3,78,22,63,064/- u/s 115JB of the Act. 1.2 The aforesaid return of income was processed by Central Processing Centre, Bengaluru ("Ld. CPC") u/s 143(1) of the Act vide intimation dated 24-07-2016 at the same returned income of Rs. 4,22,28,69,410/- under the normal provisions of the Act and boo....
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.... Nirmala Devi and others (AIR 1979 SC 1666) accepted the appeal with condonation of delay of 2984 days by taking plea that the assessee was wrongly advised by his chartered accountant earlier not to file an appeal. Copy of the order is attached as Annexure-2. 4.0 Further, reliance in this regard is placed on the order of Hon'ble Supreme court in Miscellaneous application no. 21 of 2022 regarding cognizance for Extension of Limitation has extended the period of limitation and held that the period from15-03-2020 till 28-02-2022 shall also stand excluded in computing the periods prescribed under Sections 23(4) and 29A of the Arbitration and Conciliation Act, 1996, Section 12A of the Commercial Courts Act, 2015 and provisos (b) and (c) of Section 138 of the Negotiable Instruments Act, 1881 and any other laws. Copy of the order is attached as Annexure-3. 5.0 Further, it is stated that the appellant has no intention to jeopardize the interest of revenue by delaying the filing of appeal and requests your goodself to condone the delay caused in filing of appeal. 2.1 Hon'ble Supreme Court has passed order on 10/01/2022 in In Re: Cognizance directed that fo....
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....dvised by his Chartered Account earlier not to file the appeal. 10. Having regard to this particular aspect of the matter and no malafide since being found in filing the appeal preferred by the assessee before Ld. CIT(A) which is also prima facie evident either from record or conduct of the assessee, in the interest of justice the Ld. CIT(A) found it best to decide the matter on merit instead dismissing it on the technical aspect of delay which in our considered opinion is found to be just and proper so as not to warrant interference. Thus this ground of appeal preferred by the revenue is found to be devoid of any merit and hence dismissed. Delay filing of appeal before the Ld CIT(A) for AY 2016-17 12. The appeal preferred by the assessee before the Ld. CIT(A) is found to be barred by limitation for about 635 days which has been tabulated as follows before ld. CIT(A): "1.2 The appellant appealed before Ld. CIT(A) on 06.10.2020 and hence, there is a delay of 1 year and 9 months (635 days). The period of delay is tabulated as under: Sl. No. Particulars Date Period of Delay 1 Date of receipt of order issued u/s 143(3) of the Act 26.12.2018 ....
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....the order of Hon'ble Bombay High court in the case of M/s VijayVishin Meghani & Anr. vs. DCIT (Income Tax Appeal No. 493 of 2015) wherein the Hon'ble High court relying on the order of M/s Concord of India Insurance Co. Ltd. vs. Smt.Nirmala Devi & Anr. (AIR 1979 SC 1666) accepted the appeal with condonation of delay of 2984 days by taking plea that the assessee was wrongly advised by his chartered accountant earlier not to file an appeal. 2.4 I have gone through the explanation offered by the Appellant. No mala-fides in filing the appeal belatedly are prima-facie evident either from record or the conduct of the Appellant as evident from record. Hence, I feel it would be in the interest of justice to allow the matter to be contested on merits rather than dismiss it on technicalities for delay. Therefore, as an Appellate Authority, I would rather exercise my discretion to further the cause of justice. Furthering the cause of justice can on no account be held to be arbitrary or perverse. "In the case of Improvement Trust, Ludhiana vs. Ujagar Singh &Ors. [2010 (6) TMI 660 - Supreme Court: Other Citation: 2010 (7) SCR 376, 2010 (6) SCC 786, 2010 (6) JT 205, 201....
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....ade. Why not every hour's delay, every second's delay. The doctrine must be applied in a rational, common sense and pragmatic manner. 5. When substantial justice and technical considerations are pitted against each other, the cause of substantial justice deserves to be preferred, for the other side cannot claim to have vested right in injustice being done because of a non-deliberate delay. 6. There is no presumption that delay is occasioned deliberately, or on account of culpable negligence, or on account of mala fides. A litigant does not stand to benefit by resorting to delay. In fact, he runs serious risk. 7. It must be grasped that the judiciary is respected not on account of its power to legalize injustice on technical grounds but because it is capable of removing injustice and is expected to do so. ............" 2.6 In the case of N Balakrishnan vs. M. Krishnamurthy [1998 (9) TMI 602 -Supreme Court; Other Citation: 2008 (228) E.L.T. 162 (SC), 1998 AIR 3222, 1998 (1) Suppl.SCR 403, 1998 (7) SCC 123, 1998 (6) JT 242, 1998 (5) SCALE 105], it was averred/held, as follows, by the Hon'ble Supreme Court: "....9. It is....
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....delay in approaching the court is always deliberate. .......... 13. It must be remembered that in every case of delay, there can be some lapse on the part of the litigant concerned. That alone is not enough to turn down his plea and to shut the door against him. If the explanation does not smack of mala fides or it is not put forth as part of a dilatory strategy, the court must show utmost consideration to the suitor. But when there is reasonable ground to think that the delay was occasioned by the party deliberately to gain time, then the court should lean against acceptance of the explanation.... 2.7 The Hon'ble Supreme Court in B. Madhuri Goud v. B. Damodar Reddy (2012) 12 SCC 693, by referring various to earlier decisions of Superior Courts and held the following principal must be kept in mind while considering the application for condonation of delay, (i) There should be a liberal, pragmatic, justice oriented, non-pedantic approach while dealing with an application for condonation of delay, for the courts are not supposed to legalise injustice but are obliged to remove injustice. (ii) The terms "sufficient cause should be unders....
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....iven some acceptable latitude." In the circumstances it is submitted that it was because of the bonafide mistake on the part of the assessee that he has no knowledge about the completion of the CIT(A)'s order ex-parte and he did not inquire about the service of judgment. The appeal could not be filed in time. It is submitted that for something which happened due to inadvertence and beyond the control. Hence it is the prayer of the assessee as well as of the counsel that the Hon'ble Bench may kindly condone the delay and admit." 14. Having regard to the judgment passed by the Hon'ble Apex Court in the case of B. Madhuri Goud vs. B. Damodar Reddy (2012) 12 SCC 693 and the principles laid down therein the delay condone by the ld. CIT(A) is found to be just and proper so as not to warrant interference. Thus this ground of appeal preferred by the revenue is found to be devoid of any merit and hence dismissed. 15. The Revenue has further raised grounds in regard to the decision made by the Ld. First Appellate Authority in holding the excise duty subsidy as capital receipt. It is the case of the Revenue that the same was received by the assessee on revenue account and not fo....
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.... hearing of the matter. 19. However, Remand report, therefore, was sought by ld. CIT(A) from the Ld. AO and the same was furnished by him and the following is reproduced by Ld. CIT(A) in his order: "The assessee is a public limited company engaged in the business trading of jewellery. The assessee has setup an undertaking at F-50 UPSIDC Industrial area Selaqui, Dehradun, Uttarakhand, 248011. This undertaking commenced production on 30-03-2010. As per the assessee since the said undertaking is located in the backward area, it was entitled to excise duty exemption under the Central Excise Notification No. 50/2003 - СЕ dated 10-06-2003. In terms of the said notification, the said undertaking was entitled 100% Excise duty exemption for a period of 10 years from the date of commencement of commercial production. During the year under consideration, being the 6th year, the assessee has availed excise duty exemption of Rs. 87,49,36,993/-. The incentive has been included in the total income by assessee and has offered to tax. The assessee has now raised the additional ground that the said incentive be treated as capital in nature. The assessee in its submis....
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....be admitted and the issue may be decided on the merits and facts of the case." 20. It is the case of the AO that books of account of the assessee were duly audited by a qualified Chartered Accountant and upon verification of the books of account and the financial results, the assessee has filed its return of income. Therefore, the claim of subsidy to be treated as capital receipt is nothing but a change of opinion. It was further pointed out by the Ld. AO in the remand report that the assessee should have claimed the said benefit by way of filing return or revised return. As the assessee has not claimed this deduction in the original return nor has filed revised return, relying upon the order passed by the Hon'ble Apex Court in the case of Goetze (India) Limited vs. CIT reported in (2006) 157 taxman 1, the Ld. AO commented that there was no mistake in treating the subsidy as revenue receipt by the Department in intimation u/s 143(1) and, therefore, this particular ground of appeal raised by the assessee before the Ld. CIT(A) may not be admitted. The assessee before the First Appellate Authority in support of his claim of excise subsidy to be treated as capital receipt via additi....
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....pital receipt not chargeable to tax under normal provision of the Act as well as in computing book profit u/s 115JB. 2.5 Considering the aforesaid decision of Hon'ble Jurisdictional ITAT in the case of M/s Dabur India Limited (supra), the appellant raised additional ground of appeal regarding claim of excise duty subsidy as capital receipt by way of letter dated 02-03-2023. 2.6 Therefore the Ld. AO is not correct in stating that the recent claim of the assessee is nothing but a change of opinion, as the appellant relying on the judgement of the Hon'ble Jurisdictional ITAT in the case of M/s Dabur India Limited (supra) has raised the aforesaid additional ground before your goodself. 3.0 Raising of claim by way of additional ground of appeal. AO Remarks Appellant observations Ld. AO at Para No. 4.4 has stated that, the claim of excise duty exemption as capital receipt was not claimed by the assessee in the original or revised return and considering the decision of Hon'ble Apex Court in case of M/sGoetze (India) Limited vs. CIT, (157 Taxman 1)the assessee cannot make a claim for deduction otherwise than by filing a return or revised retu....
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....respect of amounts paid by it towards "cess" in their original return of income nor did the Appellant - Assessee file any revised return of income, according to us, this was no bar to the Commissioner (Appeals) or the ITAT to consider and allow such deductions to the Appellant - Assessee in the facts and circumstances of the present case. The record bears out that such deduction was clearly claimed by the Appellant - Assessee, both before the Commissioner (Appeals) as well as the ITAT. Copy of the order is attached as Annexure-2. 3.4 Further, reliance is placed on the decision of Hon'ble Jurisdictional ITAT in the case of M/s Crystal Crop Protection (P.) Limited vs. DCIT. (ITA No. 1539 / Del /2016) wherein excise duty subsidy claim was first time made before Hon'ble ITAT and the same was accepted and adjudicated as Capital receipt. Later on, the same view was confirmed by Hon'ble High Court. Copy of the order of Hon'ble ITAT and Hon'ble High Court is attached as Anneuxre-3 & 4 for your kind perusal. 3.5 In view of above and earlier written submission, the appellant humbly requests your goodself to kindly admit the additional ground rai....
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....on filed by the appellant is as under- 1. Brief facts of the case 1. The appellant has set up an undertaking at F-50 UPSIDC Industrial Area Selaqui, Dehradun, Uttarakhand, 248011. The aforesaid undertaking commenced production on 30-03-2010. Since the said undertaking is located in the specified backward area, it was entitled to excise duty exemption under the Central Excise Notification No. 50/2003-CE dated 10-06-2003. A letter stating the entire fact that the assessee is eligible for exemption from payment of central excise for a period of 10 years filed before Deputy Commissioner, Custom & Central Excise, Dehradun is attached as Annexure-3. [Kindly refer page no. 43 of PB). Your goodself would appreciate that as per the provision of section 80-IC the appellant is also claiming deduction u/s 80IC of the Act on the said undertaking and the same has been allowed by the department for period of 10 years 2. In terms of the said notification, the said undertaking was entitled to 100% Excise Duty Exemption for a period of 10 years from the date of commencement of commercial production. During the year consideration, being the 6th year, the appellant has avail....
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....s for the state of Jammu and Kashmir (Copy of order already attached as Annexure-7). New Industrial policy and other concessions for the state of Uttaranchal and Himachal Pradesh. (Copy attached as Annexure-6) Purpose of the policy i) Acceleration of industrial development in the state of Jammu and Kashmir ii) Generation of employment in the state of Jammu and Kashmir 1) Acceleration of industrial development in the state of Uttarakhand. ii) Generation of employment in the state of Uttarakhand. Nature of receipt Treated as non-taxable receipts (capital receipts) -by Apex Court Should be treated as non-taxable receipt (capital receipts). 1 1. Further, on the identical issue, Hon'ble Jurisdictional ITAT in the case of Mis Dabur India Limited vs. Addi. CIT [ITA No. 3423/Del /2015 and 3790/Del /2015] has allowed the claim of excise duty exemption. Copy of the order is attached as Annexure-9. [Kindly refer page no. 71 to 107 of PB) 2. Hon ble Gauhati ITAT in the case of Greenply Industries Limited vs. ACIT (ITA No. 232/Gau/2019] held that In the light of above decision as well as the Memorandum issued by the Ministry of Commerce ....
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....under a mistake, misconception or on not being properly instructed is over assessed, the authorities under the Act are required to assist him and ensure that only legitimate taxes due are collected." In Sanchit Software & Solutions (P.) Ltd. vs CIT [2012] 349 ITR 404 (Bombay) it has been held that "In any civilized system, the assessee is bound to pay the tax which he liable under the law to the Government. The Government on the other hand is obliged to collect only that amount of tax which is legally payable by an assessee. The entire object of administration of tax is to secure the revenue for the development of the Country and not to charge assessee more tax than that which is due and payable by the assessee. It is in aforesaid circumstances that as far back as in 11/04/1955 the Central Board of Direct Tax had issued a circular directing Assessing Officer not to take advantage of assessee's ignorance and/or mistake." The High Court of Madras in case CIT Vs M/s. Abhinitha Foundation Pvt Ltd. (T.C. (A) No. 811 of 2016 after reffering various Judgement of SC and other High Courts on similar issue held that ".........In sum, what emerges from ....
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....y appellant is allowed." 24 It is evident from perusal of aforesaid observation of ld. CIT(A), that he has allowed the claim of the assessee, after consideration of the Remand Report of Ld. AO, wherein he himself appreciated that the scheme of exemption vide notification No. 50/2003-C.E. and he has also relied upon the judgment of Hon'ble Apex court in the case of Shree Balaji Alloys, which has been followed by other courts. Apart thereof he has also relied upon the decision of Coordinate Bench in the case M/s Crystal Crop Protection (P.) Limited vs. DCIT. (ITA No. 1539/Del/2016) to the proposition that excise duty subsidy claim can be made for the first time before the Hon'ble ITAT. 25 On perusal of the order passed by the Ld. CIT(A) and remand report along with grounds of appeal raised by revenue, we find it is an undisputed fact that appellant during the year under consideration was eligible for exemption from Excise duty as per notification dated 10.06.2003 bearing Notification No. 50/2003 "Goods Manufactured in specified areas in Uttarakhand and Himachal Pradesh - Exemption from Excise Duty" and during the year under consideration assessee has availed excise duty exe....
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....e Commissioner is co-terminus with that of the Income Tax Officer. If that be so, there appears to be no reason as to why the appellate authority cannot modify the assessment order on an additional ground even if not raised before the Income Tax Officer. No exception could be taken to this view as the Act does not place any restriction or limitation on the exercise of appellate power. Even otherwise, an Appellate Authority while hearing appeal against the order of a subordinate authority has all the powers which the original authority may have in deciding the question before it subject to the restrictions or limitation if any prescribed by the statutory provisions. In the absence of any statutory provisions to the contrary the Appellate Authority is vested with all the plenary powers which the subordinate authority may have in the matter. The Hon'ble Apex Court has also held that if the Appellate Commissioner is satisfied he would be acting within his jurisdiction in considering the question so raised in all its aspects. Of course, while permitting the assessee to raise an additional ground, the Appellate Commissioner should exercise his discretion in accordance with law and reason....
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....) Act, 1978 (40 of 1978), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts the goods specified in the First Schedule and the Second Schedule to the Central Excise Tariff Act, 1985 (5 of 1986), other than the goods specified in Annexure-I appended hereto, and cleared from a unit located in the Industrial Growth Centre or Industrial Infrastructure Development Centre or Export Promotion Industrial Park or Industrial Estate or Industrial Area or Commercial Estate or Scheme Area, as the case may be, specified in (J Annexure-II and Annexure III appended hereto, from the whole of the duty of excise or additional duty of excise, as the case may be, leviable thereon under any of the said Acts: Provided that the exemption contained in this notification shall apply subject to the following conditions, namely:- (i) The manufacturer who intends to avail of the exemption under this notification shall exercise his option in writing before effecting the first clearance and such option shall be effective from the date of exercise of the option and shall not be withdrawn during the remaining part of the financial year; ....
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....isting industrial unit as on Ist or March, 2016, which undertakes substantial expansion of existing capacity or installs fresh plant, machinery or capital goods for production of gold or silver from gold dore, silver dore or any other raw material, by using such expanded capacity or such fresh plant, machinery or capital goods, and commences commercial production from such expanded capacity or such fresh plant, machinery or capital goods, on or after 1st March, 2016. ANNEXURE-I Sl. No. Good or Activity not to be exempted Excise classification Chapter/Heading/Subheading/tariff item Sub-class under NIC classification 1998 1 Tobacco and tobacco products including cigarettes and pan masala 2401 to 2403 and 2106 1600 2 Thermal Power Plant (coal and oil based) 40102/40103 3 Coal washeries or dry coal processing 4 Inorganic chemicals excluding medicinal grade 28 oxygen (2804 4010), medicinal grade hydrogen peroxide (2847 00 00), compressed air [2853 90 301 5 Organic chemicals excluding Provitamins or 29 vitamins, hormones (2936 or 2937ides (2938), sugars (2940 00 00) Sugar reproduction ....
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.... Paper and paper board, laminated internally with bitumen, tar or asphalt Carbon or similar copying paper Products consisting of sheets of paper or paperboard, impregnated, coated, or covered with plastics and other goods of tariff item 4811 41 00, 4811 49 00, 4811 51 00 or 4811 59 00 (excluding floor coverings on a base of paper or of paperboard, whether or not cut to size) Paper and paperboard, coated, impregnated or covered with wax and other goods of tariff item 4811 60 00 4807 [4809 90 00] 48114100, 4811 49 00, 4811 51 00, or 4811 59 00 4811 60 00 20 Plastics and articles thereof 3909 to 3915 21 [Industries, notified under the Doon Valley notification [S.O. 102(E), dated the 1st February, 1989 as amended from time to time, issued by the Ministry of Environment and Forests, in the Doon Valley area of the State of Uttarakhand] ANNEXURE II 1. STATE OF UTTARAKHAND (1) DISTRICT-ALMORA (A) Existing Industrial Estates ........ . 31. It is unequivocal from the reading of aforesaid notification that the exemption contained in this notification shall apply only to the fol....
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....intent and purpose underlying the Policy and the Concessions contemplated by the Office Memorandum of 14-6-2002 and statutory notifications issued in this behalf. 22. Perusal of the Office Memorandum dated 14-6-2002 indicating New Industrial Policy and other concessions for the State of Jammu and Kashmir, makes it explicit that the concessions were issued to achieve twin objects viz., (i ) Acceleration of industrial development in the State of Jammu and Kashmir, which had been found lagging behind in such development and (ii) Generation of employment in the State of Jammu and Kashmir. Amendment introduced to the Office Memorandum vide Notification of 28-11-2003 of the Government of India, Ministry of Commerce and Industry (Department of Industrial Policy and Promotion) eloquently demonstrates the Central Government's intention in extending the incentives. The Government's objective, as conveyed by Hon'ble the Prime Minister at Srinagar on 19-4-2003, was, for creation of one lakh employment and self-employment opportunities in Jammu and Kashmir State. 23. To achieve the purpose and objective referred to herein above, it was, inter alia, provide....
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....dustrial development, which is certainly a purpose in the Public Interest, the incentives provided by the Office Memorandum and statutory notifications issued in this behalf, to the appellants-assessees, cannot be construed as mere Production and Trade Incentives, as held by the Tribunal. 28. Making of additional provision in the Scheme that incentives would become available to the industrial units, entitled thereto, from the date of commencement of the commercial production, and that these were not required for creation of New Assets cannot be viewed in isolation, to treat the incentives as production incentives, as held by the Tribunal, for the measure so taken, appears to have been intended to ensure that the incentives were made available only to the bona fide Industrial Units so that larger Public Interest of dealing with unemployment in the State, as intended, in terms of the Office Memorandum, was achieved. 29. The other factors, which had weighed with the Tribunal in determining the incentives as Production Incentives may not be decisive to determine the character of the incentive subsidies, when it is found, as demonstrated in the Office Memorandum, amend....
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....taking up the assessee appeal in ITA No. 587/Asr/2019wherein the appellant has challenged the decision of the Ld. CIT(A) that he has erred in confirming the action of the Ld. AO in making addition of Rs. 1,85,49,324/- u/s 2(24)(xviii) of the Income Tax Act, 1961 being 36% of Excise Duty Exemption availed by the assessee firm. He contended that the action of Ld. CIT(A) is illegal, unjustified, arbitrary and against the facts of the case. He pleaded that relief may be granted by deleting entire such addition made by Ld. AO and partly confirmed by the Ld. CIT(A). 15. The Ld. CIT(A) has discussed that as per section 2(24)(xviii) only two exceptions are available w.e.f. 01.04.2016 as mentioned in clause (a) & (b),i.e. subsidy or grant or reimbursement received to meet actual cost of asset as per Explanation 10 to section 43(1) and subsidy or grant by Central Government for the purpose of corpus of a trust. The exemption granted to the assessee does not fall in the category of exceptions. Therefore, any subsidy, grant, cash incentive, duty drawback, waiver, concession &reimbursement referred to in section 2(24)(xviii) is income and only because the word 'exemption' is not mentio....
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....ing statute has to be interpreted in the light of what is clearly expressed; it cannot imply any thing which is not expressed; it cannot import provisions in the statute so as to supply any deficiency; that before taxing any person, it must be shown that he falls within the ambit of the charging section by clear words used in the section; and that if the words are ambiguous and open to two interpretations, the benefit of interpretation is given to the subject and there is nothing unjust in a taxpayer escaping if the letter of the law fails to catch him on account of the legislature's failure to express itself clearly'. This principal of law as quoted has been referred by the Hon'ble Supreme Court in case of "Checkmate Services Pvt. Ltd. Vs. CIT", (2022) 448 ITR 518 vide Para 50 of its judgment. 19 Respectfully, applying the above settled principal of law, to the interpretation of the Notification No.56/2002 dtd. 14.11.2002 as amended by Notification No.19/2008 dt. 27.03.2008, the assessee is granted exemption from payment of excise duty to the balance part of 36% of total excise duty collected. Since, the word 'exemption' in not included in the of ambit the Section 2(24)(x....
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.... the same is not subsidy given to meet the cost of the project. Therefore, we are also in full agreement with the learned Tribunal that exemption from excise duty does not fall in the definition of income as envisaged under Section 2(24)(xviii) of the Act and that the amount of Rs. 1,85,49,324/- is not an income but a capital receipt not taxable under the provisions of the Income Tax Act. 13. Viewed thus, we do not find any merit in the appeal and the same is, accordingly, dismissed along with connected CM(s), if any." 36. The assessee has further relied upon the judgment passed by Chennai Bench in the case of ACIT vs. Eastman Exports Global Clothing (P) Ltd. (ITA No. 3326/Chny/2019) placed at pages 95-119 of Paper Book filed by assessee, wherein same ratio has been laid down. 37. Thus, having regard to the observation made by the Ld. CIT(A), the remand report of the Ld. AO, Notification of exemption, and the judgment of the Hon'ble High Courts and decision of Coordinate Bench, the order impugned is found to be just and proper so as to not warrant any interference. This ground of appeal as raised by the Revenue, therefore, fails. 38. So far as this identical groun....
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....y or grant or reimbursement which is taken into account for determination of the actual cost of the asset in accordance with the provisions of Explanation 10 to clause (1) of section 43, included in income. Now it is pertinent to analyse the Notification No. 50/2003 issued by the Central Govt. (supra), that the said notification provides the exemption from excise duty. Thus, we find force in the submission made by learned AR that legislature has not included the word 'exemption' and has specifically include the words subsidy, grant, cash incentive, duty drawback, waiver, concession & reimbursement and hence, in the absence of inclusion of word 'exemption' under the said clause, the said amendment is not applicable to the assessee herein. Our aforesaid view is also fortified with the decision of the Coordinate Bench in the case of The ACIT vs. Gravita Metal Inc. (ITA No. 594/Asr/2019) for Assessment Year 2016-17, placed at pages 74-90 of Assessee's Paper Book. Appeal filed by the revenue against the aforesaid decision of the Coordinate Bench before the Hon'ble High Court of Jammu & Kashmir And Ladakh in IT Appeal 1 of 2024 in the name of PCIT vs. Gravita Metal Inc. reported in 168 t....
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....e of DCIT Auangabad vs. M/s Bhagyalakshmi Rolling meal Private Limited in ITSS No. 07 TO 10 /PUN/2019. The relevant observation whereof is as follows: "10. Reverting to the facts of the present case, we find that in view of the above referred judgment, the whole purpose and the grant of subsidy under PSI 2007 by Government of Maharashtra was to promote industrial growth in the less developed areas of the State and also to provide employment in the area. Once this purpose is established the subsidy has to be a capital receipt. However, the position has changed w.e.f. 01.04.2016 relevant to A.Y. 2017-18 onwards with the amended provision of sub-clause (xviii) to sec. 2(24) of the Act. However, at present, we are concerned with A.Y. 2011-12 to 2015-16. Therefore, the amended provision of sec. 2(24) sub-clause (xviii) is not applicable to the years under consideration and thus as a natural consequence the subsidy received by the assessee would therefore, not form part of its total income. In view of the aforestated facts and circumstances and the judicial pronouncements, we do not find any reason to interfere with the findings of the Id. CIT(A) and the reliefs provided to the ....
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.... Tax Appeal No. 1132/2014]. The High Court of Bombay, in the said decision, on consideration of a similar issue, proceeded to draw the following conclusions: "(a) The issue raised in this question is consequential to question no.(f). We have already held that the subsidy received by the respondent-assessee from the State of Bihar was in the nature of capital receipt. Hence the same cannot be added to arrive at book profits of the respondent-assessee under Section 115J of the Act. (b) However, it is pertinent to note that the question as proposed also seeks addition to book profits on account of excess depreciation along with subsidy received by the respondent-assessee. It is settled position in law as held by the Apex Court in Apollo Tyres Ltd. v/s. CIT 122 Taxman 562/255 ITR 273 (SC) that the Assessing Officer while computing the book profit under Section 115J of the Act has only a power to examine whether the books of account have been maintained in accordance with the provisions of the Companies Act and have been duly audited. The book profits as reflected in the duly audited account have to be accepted by the Assessing Officer and the only limited power he has....