TaxTMI 
TaxTMI 
2026 (8) TMI 282
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....ed as 'the Act') arising from the assessment order passed by the NFAC, Delhi (hereinafter referred to as the "AO") under section 143(3) of the Income Tax Act, 1961 for the Assessment Year 2016-17. 2. Brief facts of the case are that the assessee is a company incorporated on 29.09.2009, is a concessionaire for the development of a water supply system in Naya Raipur City under a Build Operate Transfer (BOT) agreement with the Naya Raipur Development Authority (NRDA). The company filed ITR for A.Y 2016-17 on 16.10.2016 declaring a loss of Rs. 10,68,919/-, which was later revised on 29.03.2018 to a loss of Rs. 3,18,33,545/-. The case was selected for scrutiny under CASS. Notices under sections 143(2) and 142(1) were issued between 08.08.2017....
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....lete ignorance of the provisions of the Act by grossly violating the provisions of natural justice by passing the impugned order without even providing any opportunity of personal hearing. 3. That the NFAC/ CIT(A) grossly erred on facts and in law, in passing the impugned order without appreciating the detailed submissions and contemporaneous documents furnished by the appellant and without any independent application of mind. 4. That on the facts and circumstances of the case and in law, the NFAC/CIT(A) failed to appreciate that the impugned additions/disallowances already stood squarely covered in favour of the appellant by virtue of the orders passed by the Hon'ble Tribunal for preocoding years. Re: Capital....
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....urred in construction of project over and above the financial assistance/grant received, proportionately amortized over the period of concession 9. That on the facts and circumstances of the case and in law, the NFAC/CIT(A) erred in disallowing the amount of Rs. 3,07,64,626 claimed as deferred revenue expenditure by the appellant being the excess cost incurred for construction of project (over and above the capital assistance) amortized proportionately over the total period of concession. 10. That on the facts and circumstances of the case and in law, the NFAC/CIT(A) grossly failed to appreciate that the claim of the appellant of the deferred revenue expenditure being the excess cost incurred for construction of the projec....
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.... the claim of excess cost incurred for construction of project over and above the capital assistance amortized proportionately over the total period of concession, it is submitted that the issue is also covered in favour of the assessee by the CBDT Circular No.9/2014 dated 23.04.2014 which provides that net expenditure incurred on a project for development of roads/highways/public amenities/etc. should be amortized over the concession period. The ld AR also submitted that the ITAT in assessee's own case for AY 2013-14 had held the issue in favour of the assessee. 6. Per contra, learned DR relied on the order of the AO and CIT(A). 7. We have heard the rival submissions and perused the material available on record. The issue of financia....
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....ITA No. 1102-1103/Del/2018, order dated 28.11.2019, after considering in detail facts and following judgment of Hon'ble Supreme Court in the case of Sahni Steel & Press Works Ltd. 228 ITR 253 (SC) held that the nature of financial assistance given by NRDA to the assessee is capital in nature and the amount received by the assessee is a capital receipt not chargeable to tax. The Tribunal observed in paras 12 and 13 as follows: "12. As mentioned elsewhere the bone of contention is the treatment of financial assistance received by the assessee from NRDA. In our considered opinion, taxation of grant/subsidy by whatever name called is determined by the purpose for which the grant/subsidy is granted. This view is fortified by the decisio....
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....amount received by the appellant is capital receipt." (Emphasis supplied)" 7. When this was pointed out to the Ld. DR, he could not contradict the above facts. Taking a consistent view, and respectfully following the decision of the Tribunal in assessee own case, we uphold the order of CIT(A) deleting the addition. Accordingly, this issue in the Revenue's appeal is dismissed. Respectfully following the decision of the coordinate Bench of ITAT above and the settled law as laid down by the judicial precedents mandated in V.S.S.V. Meenakshi Achi: 60 ITR 253(SC), Sahney Steel and Press Works vs. CIT: 228 ITR 253 (SC), CIT v. Ponni Sugar and Chemicals Limited: 306 ITR 39215, we hold the assistance/incentive paid for development/setti....