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2019 (2) TMI 1837 - AT - Income TaxRevision u/s 263 - Subsidy given under the Package Scheme of Incentives, 2007 - HELD THAT:- We find that the subsidy received by the assessee under PSI, 2007 Scheme in the form of refund of sales tax, is of capital receipt and the same is not liable to tax. For this proposition, we rely on the decision of the coordinate bench decision of the Tribunal in the case of Rasiklal M. Dhariwal (HUF) Vs. DCIT [2011 (3) TMI 1619 - ITAT PUNE]. Similar claim was allowed by the Revenue in the assessment year 2012-2013 also, in which case, the examination of the issue for establishment of true nature of subsidy shall only breed the multiplication of the proceedings. The same issue need not be examined every year, wherever subsidy is received by the assessee. Further, there is an amendment to the provisions of section 2(24) clause (xviii) of the Act by the Finance Act, 2015. The subsidy is an income after the amendment. The said clause was further amended in 2017. After the amendment, the subsidy segment, which is capitalized to the actual cost is not the income and the assessee is allowed to claim the depreciation u/s 32 of the Act. These amendments do not apply to the assessment year 2013- 14 under consideration as the amendments apply prospectively only. Infact, the Assessing Officer examined all these issues before treating the subsidy as capital receipt. From this point of view merely based on the ground of verification of the issue by the Assessing Officer, invoking of the provisions of Section 263 of the Act is uncalled for and unsustainable under law. We find merit in the same and uphold the view taken by the Assessing Officer in regular assessment order. Accordingly, the ground no.1 and 2 raised in the appeal on this issue are allowed. Share Premium & Application of Section 56(2)(viib) - treatment of Share premium u/s 68 of the Act – cum the applicability of the provisions of section 56(2)(viib) of the Act read with Rule 11UA of the I.T. Rules - HELD THAT:- We find that the Pr. CIT failed to issue show cause notice undisputedly. Therefore, in our opinion, the order of the Pr.CIT requires to be reversed on this issue. As such, ld.DR could not make out a case that the issue of share premium and the share capital relate in the assessment year 2013-2014 under consideration. The assessee’s claim of receiving share capital/share premium in the assessment year 2011-2012 stand undisputed. Therefore, the assessee wins on this ground too. Accordingly, the ground no.3 stands allowed. Levy of Penalty u/s 271B r.w.s. 44AB - HELD THAT:- We find that the order of the Tribunal in case of Shri Nandkumar Bhalchandra Bhondve [2016 (10) TMI 216 - ITAT PUNE] was decided in the context of the Assessing Officer’s failure to initiate penalty proceedings u/s.271(1)(c) of the Act. The Pr.CIT assumed jurisdiction u/s.263 of the Act for making good of the said lapses of the Assessing Officer. On these facts in para 8 & 9 the Tribunal held that the Pr. CIT cannot initiate the penalty proceedings - matters relating to initiation of penalty proceedings u/s.271B of the Act is not approved. - Decided in favour of assessee.
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