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2021 (3) TMI 265 - AT - Income TaxDisallowance of deduction u/s 80IC - Transport Subsidy, Power Subsidy and Interest Subsidy - nexus between the profits and gains of the industrial undertaking or business - HELD THAT:- We note that the Hon’ble jurisdictional High Court (Guwahati High Court) while dealing with the nature of the above referred subsidy (transport subsidy, power subsidy and interest subsidy) [2013 (7) TMI 175 - GAUHATI HIGH COURT] Aforesaid decision of the Hon’ble Guwahati High Court was confirmed in CIT vs. Meghalaya Steel Ltd. [2013 (7) TMI 175 - GAUHATI HIGH COURT] in favour of the assessee by holding as Transport subsidy, interest subsidy, power subsidy and insurance subsidy are revenue receipts which are reimbursed to the assessee for elements of cost relating to manufacture and sale of its products; there is certainly a direct nexus between the profits and gains of the industrial undertaking or business and such subsidies and therefore, the amount received by the assessee as subsidies qualify for deduction under Section 80IB and 80IC. The assessee succeeds and claim of the assessee in respect of deduction u/s 80IC of the Act in respect of subsidy (transport subsidy, power subsidy and interest subsidy) should be granted and the AO is directed to do so. - Decided in favour of assessee.
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