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2018 (6) TMI 356 - AT - Income TaxSales Tax (VAT) Exemption Benefit - Nature of receipt - revenue or capital - assessment as income - Held that:- Assessee company has received aforesaid incentives in the nature of capital receipt from the Central and State Governments in the form of sales tax exemption under the Kutch District Economic Development Encouragement Policy, 2001 formed by the Gujarat Government and refund of Excise Duty vide notification No.39/2001- C.E dated 31/07/2001 for putting up industries in the district of Kutch which was badly devastated by a high intensity earthquake. The incentives have been granted for the rehabilitation of the said district and to generate employment there so as to bring life back to the normalcy and for attracting capital investments. The basis of computation of incentives are disbursed in the form refund a excise duty/exemption of sale tax/VAT payable by the companies setting up industries in the said district (notified area). The assessee company has set up an industrial unit in the Kutch District and has received incentive for setting up an industrial unit in Kutch District in accordance with the scheme formulated by the Government. Similar receipts in the form of incentives have been held to be in the nature of capital receipt by the Appellate Authority viz. CIT(A) and ITAT in the assessee’s own case for Asst. Year 2006-07 Co-ordinate Bench has held in the matter of Genus Electrotech Ltd.[2016 (5) TMI 1136 - ITAT AHMEDABAD] that subsidies do not have any income element and therefore, they should be excluded for the computation of income u/s.115JB of the Act. Sales tax incentive and excise incentive are capital receipts and hence, they are not liable for inclusion under the computation of book profit u/s.115JB of the Act - SHREE CEMENT LTD., [2011 (9) TMI 561 - ITAT JAIPUR] - Decided against revenue
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