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2018 (4) TMI 1200 - AT - Income TaxSales tax subsidy treated as capital receipt - nature of receipt - Held that:- In view of the scheme of Government of Gujarat which set up to provide employment opportunities to the unemployed youth, the subsidy is to be considered as capital receipt only. Respectfully following the case of CIT Vs. M/s. Lincon Polymers Pvt. Ltd.(2006 (12) TMI 549 - GUJARAT HIGH COURT) which directly applies to the scheme, we hereby affirm the order of CIT(A) and reject the grounds of Revenue. Whether the subsidy amount can be adjusted in the cost of depreciable assets? - Held that:- As relying on Bajaj Consumer Care Ltd., Vs. ACIT [2011 (2) TMI 1449 - ITAT HYDERABAD] we hold that order of CIT(A) to that extent is not correct and the amount of subsidy cannot be adjusted to the cost of a depreciable assets. Accordingly, we set aside the last portion of the CIT(A)’s order and direct the AO not to adjust the subsidy so received out of the cost of depreciable assets [WDV] in each of the impugned assessment years. The grounds are considered accordingly allowed. Valuation of closing stock - Excise Duty paid on finished goods inclusion - Held that:- CIT-A correctly held that Excise Duty is not leviable in the finished goods and accordingly, question of making addition of the same amount to the closing stock does not arise. See case of CIT Vs. Dynavision Ltd., [2012 (9) TMI 265 - SUPREME COURT] - Decided in favour of assessee.
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