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2020 (6) TMI 100 - AT - Income TaxSubsidy receipt - Addition of industries promotion assistance [IPA] received as subsidies by assessee under the West Bengal Incentive Scheme 2000 - capital receipt OR revenue receipt - CIT-A deleted the addition - HELD THAT:- We note that the Govt. of West Bengal has decided to grant the subsidy by way of IPA for setting up of large/medium/small scale eligible unit which is prescribed in the WBIS 2000 and the unit has to be set up in either group B or C areas prescribed in the said scheme (WBIS 2000). We note that the assessee had set up a new unit in the Bankura District of West Bengal area which falls in the group C area of the Scheme WBIS 2000. The object of the subsidy in this case in was for setting up of unit in group B or C areas as spelled out in the WBIS scheme 2000 and since the object of the assistance under the subsidy scheme was to enable the assessee to set up unit, the receipt of subsidy was on capital account. We note that the Hon’ble Supreme Court in the subsequent decision after considering the Sahaney Steel & Press Works Pvt. Ltd. [1997 (9) TMI 3 - SUPREME COURT] AND in the case of CIT Vs. Pony Sugars & Chemicals Ltd. [2008 (9) TMI 14 - SUPREME COURT] has made it clear that for determining the nature of the incentive/ subsidy, the object for which the subsidy/assistance given will be the deciding factor and the form or the method of the payment through which the subsidy is given is irrelevant. Merely because the amount of subsidy was equivalent to 75% of the sales tax paid by the beneficiary does not imply that the same was in the form of refund of sales tax paid. Therefore, since the subsidy was for setting up of large/medium/small scale eligible unit in group B and C areas in the State of West Bengal and the competent authority has issued the eligibility certificate (West Bengal Industrial Development Corporation Ltd.) to the assessee and since the assessee fulfills all the conditions as laid in the WBIS 2000 scheme, the industrial promotion assistance it received was on capital account. In the light of the discussion above and relying on the ratio laid in the decision of the Hon’ble Calcutta High Court in M/s. Rasoi Ltd. [2011 (5) TMI 23 - CALCUTTA HIGH COURT]we uphold the order of the ld. CIT(A) since the subsidy/IPA was given to the assessee for setting up of mega project/unit in the district of Bankura, West Bengal. - Decided against revenue. Order being pronounced after ninety (90) days of hearing - COVID-19 pandemic and lockdown - HELD THAT:- Taking note of the extraordinary situation in the light of the COVID-19 pandemic and lockdown, the period of lockdown days need to be excluded. See case of DCIT vs. JSW Limited [2020 (5) TMI 359 - ITAT MUMBAI]
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