TaxTMI 
TaxTMI 
2025 (9) TMI 1565
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.... (A.Y.) 2017-18 in the proceedings under Section 143(3) of the Income Tax Act, 1961 (hereinafter referred to as 'the Act'). 2. The brief facts of the case are that the assessee had filed its return of income for the A.Y. 2017-18 on 28.11.2017 declaring total income of Rs. 45,19,410/-. The case was selected for scrutiny under CASS. The assessment was completed under Section 143(3) on 27.11.2019 at total income of Rs. 2,23,88,384/-. In the course of assessment, the Assessing Officer had made additions on account of disallowance of subsidy on intangible asset, disallowance of depreciation on intangible asset, disallowance under Section 36(1)(iii) of the Act and disallowance under Section 36(1)(va) of the Act. 3. Aggrieved with the order ....
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....t, the Ld. CIT(A) has erred in not providing video hearing before adjudicating the case, especially when Appellant specifically asked for the same to explain the case. 7. The appellant craves leave to add, alter or amend and/or withdraw any ground or grounds of appeal either before or during the course of hearing of the appeal." 5. The first two grounds taken are general in nature and were not pressed by the Ld. AR. Hence, the same are dismissed. 6. The 3rd ground pertains to addition of Rs. 71,00,000/- treating the capital subsidy received by the assessee as revenue receipt. Shri Biren Shah, Ld. AR of the assessee explained that subsidy of Rs. 71,00,000/- was received from the Government of Gujarat under the scheme to promot....
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....er contra, Shri B.P. Srivastava, Ld. Sr. DR submitted that the Assessing Officer had rightly treated the subsidy of Rs. 71,00,000/- as revenue receipt since as per Government of Gujarat's subsequent communication it was evident that the software could not be considered as capital subsidy. He, therefore, strongly supported the orders of the lower authorities. 8. We have considered the rival submissions. It transpires that the assessee had received subsidy of Rs. 2,40,19,437/- from Government of Gujarat as incentive under IT/ITES Policy (2016-21). Out of the total subsidy so received, a sum of Rs. 1,41,31,000/- was treated as capital subsidy and netted off from the gross block of fixed assets and remaining amount of Rs. 98,88,437/- was cre....
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....he Government of Gujarat, the same cannot be treated as revenue receipt in the hands of the assessee. The nature of the subsidy remained capital subsidy as long as it was appearing in the books of account of the assessee. Therefore, the Revenue was not correct in treating the sum of Rs. 71,00,000/- as revenue subsidy and making addition in this regard. The addition made by the Assessing Officer was on wrong appreciation of facts of the case. The capital subsidy of Rs. 71,00,000/- received by the assessee was correctly accounted for by netting off from the gross block of fixed assets. Therefore, no addition was called for in this regard by holding it as revenue subsidy. Accordingly, the addition made by the Assessing Officer is deleted. The ....
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....the Assessing Officer was correct. The Ld. Sr. DR strongly supported the orders of the lower authorities on this issue. 11. We have considered the rival submissions. It is found from the Balance Sheet of the assessee company that the assessee had shown addition of Rs. 3,70,91,504/- under the head "Computer Software" and the capital subsidy of Rs. 71,00,000/- was reduced from this block of fixed asset. The purchase of computer software was duly confirmed by the vendor Karnavati Infrastructure Projects Limited. According to the Revenue, the software purchased by the assessee was not the first purchase but it was re-sale of used software and, therefore, the assessee was not eligible for capital subsidy. This is altogether a different aspect....
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....) for brand advertisement. The Assessing Officer had noticed that no advertisement expense in the name of BCCL was claimed during this year. Therefore, this advance was not considered as being for business purpose and the Assessing Officer had held that the loans and advances availed by the assessee was diverted towards this interest free advance to BCCL. Accordingly, the Assessing Officer had made disallowance of interest expenses of Rs. 35,76,692/- u/s 36(1)(iii) of the Act. The Ld. AR explained that this advance was given by the assessee in the Financial Year 2007-08, in support of which the ledger account for that year was brought on record. Further, the assessee had claimed advertisement expense of Rs. 77,47,598/- in that year and the ....