Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2016 (5) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2016 (5) TMI 765 - AT - Income TaxTreatment of subsidy receipt - capital or revenue subsidy - Held that:- It is clear from the reading of the objective of the scheme is to was to enable the assessee to set up a new unit. The object of the Scheme in the present case was to promotion of' industries in the state of West Bengal. It was available to a "New Unit" which has been defined under the scheme to mean an industrial unit in the large medium/small scale sector having investment in capital assets which is established and commissioned by the entrepreneur for the manufacture of goods in West Bengal, for the first time on or after the 1st January, 2000 and is registered with the Directorate of Industries/Directorate Cottage & Small Scale Industries/Directorate of Tourism. Once the objective of the scheme is to enable setting up of a new unit, the manner and quantum in which the subsidy is disbursed is of no consequence. In the given facts and circumstances of the case. Merely because subsidy received was equivalent to a substantial percentage of the sales tax paid, it cannot be construed that the same was in form of refund of sales tax paid and exigible to tax. Hence one time subsidy received from the State Government under the scheme of industrial promotion for expansion of its facilities and for modernization purposes is capital receipt and cannot be brought into tax net. Depreciation on moulds - Held that:- We are of the view that the issue requires fresh consideration by the AO. There is no basis to come to a conclusion that rolling mills used in iron and steel industry are also in the nature of moulds but are in a rolling form. As to whether they are materially same or different cannot be decided without technical and expert evidence. It is also seen that moulds used in rubber and plastic manufacture are entitled to higher depreciation of 30%. A different treatment for moulds used in iron ingot manufacture cannot be allowed on the basis of such general observations as done by the CIT(A). Therefore we set aside the order of the CIT(A) on this issue and direct the AO to examine the claim of the Assessee in the light of the observations made above.
|