TMI Blog2012 (7) TMI 792X X X X Extracts X X X X X X X X Extracts X X X X ..... y on account of subsequent retrospective amendment in law that the advance tax paid by the appellant would faIl short as it was not possible for the appellant to foresee the retrospective amendment to take place and pay advance tax on the basis of the amended law - in favour of assessee. - ITA Nos.678 & 679/Del/2012 - - - Dated:- 22-6-2012 - Shamim Yahya, C M Garg, JJ. For Appellants: Shri Ajay Vohra, Rohit Jain, Adv. Upvan Gupta, CA For Respondent: Shri RIS Gill, Sr. DR ORDER Per: Shamim Yahya: These appeals by the Revenue are directed against the respective order of the Ld. Commissioner of Income Tax (Appeals) for assessment years 2005-06 2006-07. 2. The grounds raised in ITA No. 678/Del/2012 read as under:- 1. On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the addition of Rs. 5,77,95,190/- made on account of treatment of sales tax subsidy as revenue receipts. 2. On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in directing the AO not to charge interest u/s. 234B. 3. The appellant craves leave to add, alter or amend any ground of appeal raised above at the time of h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stries was 1979 scheme, however in the 1993 scheme terms and conditions are of the same nature and intent as is evident from the following comparative chart filed by the ld. Counsel. Salient features 1979 Scheme 1993 Scheme Object of subsidy (see preamble) Promotion of industrialization in backward areas of the State of Maharashtra through Scheme of incentives. Promotion of industrialization in backward areas of the State of Maharastara through scheme of incentives. Eligibility claim a) Eligible unit to make application after completion of initial effective steps. b) Complete final effective steps. a) Eligible unit to make application after completion of initial effective steps. b) Complete final effective steps. Initial steps Effective possession of land Obtaining provisional SSI registration/ letter of intent from Government of India and / or permission from State Government for setting up eligible unit. Effective possession of land Obtaining provisional SSI registration/ letter of intent from Government of India and / or permission from State Government for setting up eligible ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Synthetics Ltd. for A.yrs. 2003-04 2004-05, on comparison of the 1979 scheme and the 1993 had held the sales tax subsidy received from the Maharastara Govt. under the 1993 scheme as not a revenue receipt. Ld. CIT(A) noted that CIT(A) for A.Y. 2004- 05 in the case of Indo Rama Synthetics Ltd. has held on the issue as under:- In the present case, the purpose of granting sales tax incentive is clearly only to provide and incentive for establishment of new industries regions or to expand its existing units of the State of Maharastara. The intention is not to increase the viability of the eligible units but to promote development of further industry and infrastructure in the region. In the aforesaid circumstances, the exemption availed of by the appellant s eligible units under the said notification would, in view of view of the decisions cited above, be a capital receipt not liable to tax. Therefore, this ground is held in favour of the appellant and notional amount of sales tax subsidy is held as capital receipt not chargeable to tax. The Ld. CIT(A)-XV had also allowed this sales tax subsidy disallowance in the A.Y.2003-04 relying on the case of law of DCIT vs. Reliance Industri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has imposed interest u/s. 234B of the IT Act on the assessee. Assessee in this regard submitted to the Ld. CIT(A) as under:- It is respectfully submitted that since there was no default on the part of the appellant in payment of advance tax under sections 208 to 210, no interest is leviable under section 234B of the Act in view of the legal position discussed hereunder: The provisions of sub-section (1) of section 234B read as under: 234B Interest for defaults in payment of advance tax. (1) Subject to the other provisions of this section, where, in any financial year, an assessee who is liable to pay advance tax under section 208 has failed to pay such tax or, where the advance tax paid by such assessee under the provisions of section 210 is less than ninety per cent of the assessed tax, the assessee shall be liable to pay simple interest at the rate of one per cent for every month or part of a month comprised in the period from the 1st day of April next following such financial year to the date of determination of total income under sub-section (1) of section 143 and where a regular assessment is made, to the date of such regular assessment, on an amount equal to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e case of DCIT vs. Uttam Sugar Mills Ltd. in ITA No. 3223/Del/2010 vide order dated 16.12.2010 reported in 137 TTJ 157 . Ld. CIT(A) noted that the Tribunal considered whether in view of retrospective amendment made by the Finance Act, 2008 inserting section 115JB(2), Explanation 1(h) in the Act which provided that the book profit be increased by the amount of the deferred tax w.e.f. 1.4.2001, interest u/s. 234B and 234C could be levied by the AO on the income computed u/s. 115JB. The Bench held as under:- The question is as to whether interest under ss. 234B and 234C of the Act can be charged for default in payment of advance tax and for deferment of advance tax, respectively, where the payment of tax became due only because of the amendment by way of insertion of Explanation 1(h) to s. 115JB (2) of the Act, the amendment having been made operative retrospectively. It was due to the filing of the revised statement of assessable income, that the book profit was increased by the amount of the deferred tax. But for the retrospective amendment, the assessee was not liable to be taxed on account of adjustment of deferred tax. Undeniably, this is the obtaining legal position as pe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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