TaxTMI 
TaxTMI 
2026 (5) TMI 1064
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....ed its return of income u/s 139(1)of the Income Tax Act, 1961 (hereinafter referred to as 'the Act') declaring total income of Rs. 132,05,84,670/-. The assessee's return of income was processed u/s 143(1) of the Act vide intimation dated 24.12.2021 and the assessee's income was determined at Rs. 143,12,85,320/-. Thereafter, the assessee's return was selected for scrutiny under CASS. During the course of scrutiny assessment proceedings, the assessee filed revised computation of income. The Assessing Officer (AO) rejected revised computation filed by the assessee and completed the assessment by making addition/disallowance of Rs. 1,48,38,495/-. Aggrieved by the assessment order dated 24.03.2022, the assessee filed appeal before the CIT(A). In appeal, the assessee inter alia assailed findings of the AO in rejecting assessee's claim that the Excise Duty/GST subsidy received during the relevant assessment year was not taxable under the normal provisions of the Act. The ld. Counsel submits that the assessee has a unit in Jammu & Kashmir. The Government of India, Ministry of Commerce & Industry, in order to augment industrial growth in the State of Jammu & Kashmir, introduced New Industri....
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.... the Coordinate Bench of the Tribunal, wherein under the same industrial policy, the subsidy received has been held to be not taxable, being capital in nature. He thus prayed for reversing findings of the CIT(A) on this issue. 4. Per contra, Shri Manoj Kumar, representing the Department vehemently defended the impugned order and prayed for dismissing appeal of the assessee. The ld. DR submits that the assessee in the return of income, itself had offered the subsidy amount to tax and subsequently by way of revised computation claimed the subsidy amount as exempt. For making any claim before the Act, the assessee was required to file revised return of income. 5. Both sides heard, orders of the authorities below examined. The documents and case laws referred to during the course of submissions by the ld. Counsel for the assessee considered. The limited issue for consideration in the present appeal by the assessee is; Whether the subsidy received by the assessee during the period relevant to assessment year under appeal is exigible to tax? Admittedly, in the return of income the assessee offered subsidy received during the relevant period to tax as Revenue receipt. The assessee m....
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.... provided to all new industrial units in notified locations for a period of 10 years after commencement of commercial production. This benefit would also be extended to existing units in notified locations on expansion, as defined, as well as to Annexure-Il Thrust Industries. (iv) The insurance premium to the extent of hundred percent on capital investment for a period of 10 years would be extended by the Central Government to all new units and to existing units on substantial expansion, as defined. (v) The present income tax exemption would continue as per the existing dispensation applicable to Jammu & Kashmir. The State Government may consider extending Sales Tax exemption to the units which avail of concessions under this policy." 7. Thereafter, on 14.11.2002 notification no. 56/2002 was issued by the Govt. Of India under Central Excise, the said notification reads as under:- "In exercise of the powers conferred by sub-section (1) of section 5A of the Central Excise Act, 1944 (1 of 1944), read with sub-section (3) of section 3 of the Additional Duties of Excise (Goods of Special Importance) Act, 1957(58 of 1957) and sub-section (3) of section 3 of ....
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.... New industrial units which have commenced their commercial production on or after the 14th day of June 2002. (b)Industrial units existing before the 14th day of June 2002, but which have undertaken substantial expansion by way of increase in installed capacity by not less than twenty five percent on or after 14th day of June 2002. 4. The exemption contained in this notification shall apply to any of the said units for a period not exceeding ten years from the date of publication of this notification in the Official Gazette or from the date of commencement of commercial production whichever is later." 8. We find that the Coordinate Bench of the Tribunal in the case of ACIT vs. Gravita Metal Inc. in ITA No.594/ASR/2019 for A.Y. 2016-17 vide order dated 15.06.2023 considered identical issue, i.e., taxability of subsidy amount under the New Industrial Policy launched for the State of Jammu & Kashmir on 14.06.2002. The Coordinate Bench, after considering the New Industrial Policy for the State of Jammu & Kashmir giving incentives for establishing new industrial undertakings and expansion of existing units and various decisions on the issue, held as under:- ....