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2019 (5) TMI 1782 - AT - Income TaxTreatment of interest reimbursement under TUFS (Technology Upgradation Fund Scheme) - whether capital or revenue in nature - CIT(A) treating it as capital in nature - HELD THAT:- Nature of the subsidy received under TUFS Scheme and after analyzing the terms of the scheme and finding that the purpose of the scheme was to induce modernization of plant and machniery used in textile industry ,held the same to be capital in nature following the proposition laid down by the apex court for determining the nature of subsidy in the case of Sawhney steels [1997 (9) TMI 3 - SUPREME COURT] and Ponni Sugars [2008 (9) TMI 14 - SUPREME COURT]. DR has been unable to bring to our notice any contrary decision either of the Hon'ble Jurisdictional High Court or the Hon'ble Apex Court on this issue nor was the decisions relied upon by the Ld.CIT(A) distinguished before us. No hesitation in upholding the order of the CIT(A) relying on SHAM LAL BANSAL [2011 (1) TMI 409 - PUNJAB AND HARYANA HIGH COURT] and M/S. GLOSTER JUTE MILLS LTD. [2018 (8) TMI 1474 - CALCUTTA HIGH COURT] that considering the objective of the TUF Scheme the interest received under TUF Scheme is capital in nature. Grounds of appeal raised by the Revenue are, therefore, dismissed. Interest u/s 244A - Claim shall not be granted on the amount of refund due to the assessee in relation to interest reimbursement under TUFS (Technology Upgradation Fund Scheme) - assessee has vehemently argued that it was entitled to interest on refund - HELD THAT:- In the present case, the Ld.CIT(A) has given the direction of no interest being granted on refund, without giving the assessee any opportunity of hearing and considering the forceful arguments of the assessee before us based on decisions of Courts as cited above, we hold ,that the issue needs reconsideration. Further noting the interpretation of the relevant section dealing with interest on refunds i.e. section 244A of the Act, as above, we are in agreement with the DR that the issue needs to be considered in the factual matrix of the case before us. We therefore consider it fit to restore the issue back to the CIT(A) to consider the same afresh. The Ld.CIT(A) is directed to give due opportunity of hearing to the assessee and thereafter decide the issue in accordance with law. Appeals of the assessee are allowed for statistical purposes.
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