TMI Blog2018 (12) TMI 1891X X X X Extracts X X X X X X X X Extracts X X X X ..... Manipal Universal Learning Pvt. Ltd. , [ 2013 (7) TMI 169 - KARNATAKA HIGH COURT] and CIT vs. Hindustan Coca-Cola Beverages (P) Ltd. [ 2011 (1) TMI 138 - DELHI HIGH COURT] Claim of additional depreciation - HELD THAT:- CIT(A) allowed the assessee s claim, following M/s Automotive Coaches Components Ltd. vs. DCIT ,[ 2016 (4) TMI 34 - ITAT CHENNAI] , for A.Y. 2008-09, wherein, it was held that if additional depreciation could not be allowed at the rate of 20% during the year in which the machinery was installed, the balance 50% has to be allowed in the subsequent year, and CIT vs. Rittal India (P) Ltd. , [ 2016 (1) TMI 81 - KARNATAKA HIGH COURT] in which, it was held that the proviso to Section 32 (1)(iia) of the I.T. Act would not restrain the assessee from claiming the balance of the benefit of additional depreciation in the subsequent assessment year.No decision contrary to the above decisions has been brought to our notice. Hence, finding no error therein, the order under appeal on this issue is also confirmed. Receipt of interest subsidy from the Rajasthan Govt. - Revenue or capital receipt - HELD THAT:- The case of the Department is that in Sahney Steel Pre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... law and on facts by allowing the relief of ₹ 13,74,26,007/-, on account of additional depreciation. 5. Ld. Commissioner of Income Tax (Appeals)-II, Kanpur has erred in law and on facts by allowing the relief ₹ 5,93,88,041/- on account of Subsidy received from Rajasthan Govt. treated as capital receipt without appreciating the fact that the subsidy has to be treated capital or revenue has been dealt with by the Hcn'ble Supreme Court in the case of Sahney Steel Pressing Works Ltd. Vs. CIT(1997)228 ITR253, wherein it has been said that in the case of subsidy, the assessee was free to use the money in its business entirely as it liked and was not obliged to spend the money for particular purpose. 2. Apropos Ground Nos. 1 to 3, the assessee is a Public Limited Company and it has acquired and taken over the cement undertakings of J.K. Synthetics Ltd. ( JKSL for short) as a going concern with effect from 4.11.2004, relevant to A.Y. 2005-06, for a purchase consideration of ₹ 467.95 crores and also issue of one share of J.K. Cement Ltd. against ten shares of JKSL, aggregating to ₹ 7,42,69,500/-, free of cost. It has been capitalized by assessee comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... finance, even then it is eligible for depreciation in the light of the aforesaid judgments of the Hon ble High Court and the Hon ble Apex Court. Therefore, we are of the considered opinion that the ld. CIT(A) has rightly adjudicated the issue and we do not find any infirmity therein. Accordingly, we confirm his order in both the years. 5. Further, for A.Ys. 2007-08 to 2011-12, vide order (APB 81-94) dated 30.10.2015, the Tribunal has reiterated this position to uphold the CIT(A) action in reversing the assessment orders. The Tribunal has held as follows: During the course of hearing, the ld. DR simply placed reliance upon the order of the AO on this issue, whereas the ld. Counsel for the assessee has placed heavy reliance upon the aforesaid order of the Tribunal. Since no contrary view has been brought before us by the Revenue, we find no justification to differ from earlier view taken by the Tribunal on this issue, we accordingly following the order of the Tribunal decide the issue in favour of the assessee. Consequently, the order of the CIT(A) in this regard is confirmed. 6. The aforesaid Tribunal orders for A.Ys. 2005-06 and 2006-07 and 2007-08 to 2011-12 have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... received interest subsidy of ₹ 5,93,88,041/- from the Rajasthan Govt. The assessee showed this as capital reserve in its balance sheet. The AO, however, treated it as a revenue receipt, following the assessment orders for earlier years. The ld. CIT(A) allowed the assessee s claim of capital receipt, following the first appellate orders for A.Ys. 2007-08 to 2011-12, as affirmed by the ITAT vide its order (supra) dated 30.10.2015. 11. The Tribunal, vide its order (supra) dated 30.10.2015, for A.Ys. 2007-08 to 2011-12, has upheld the CIT(A) s similar action, holding : 6. Having carefully examined the orders of the lower authorities, in the light of rival submission, we find that as per Raj Investment Policy 2003 appearing at page nos. 38 to 49 of the compilation of the assessee, the scheme will be applicable to all new investments and investments made in the existing units and enterprises for Modernization/Expansion/Diversification, subject to the condition that such units commence commercial production/operations owing to such investment during the operative period of the scheme. As per clause 3 and 7 the subsidy shall be available to the investors for seven years from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bsidies must be treated as assistance for the purpose of the trade. In the case of Ponni Sugars and Chemicals Ltd. their lordship has held that the nature of subsidy is to be determined in respect of purpose for the subsidy is granted. The character of subsidy is to be determined with respect to subsidy is granted. In other words one has to apply the purpose test. The point of time as subsidy paid is not relevant. The source is immaterial if the object of the subsidy is to enable the assessee to run the business more profitably then the receipt is of revenue receipt. On the other hand, object of the assistance under the subsidy scheme is to enable the assessee to setup a new unit or to expend an existing unit then the receipt of the subsidy is a receipt in capital account. Their lordship has further held that after reversing the judgment of the High Court that main eligibility condition in the schemes was that the incentive had to be utilized for repayment of loans taken by the assessee to setup new units or for substantial expansion of an existing unit. Their lordship accordingly held that the subsidy received by the assessee was not in the course of trade but was of capital natur ..... X X X X Extracts X X X X X X X X Extracts X X X X
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