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2015 (4) TMI 515

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..... e concerned assessment year and had adopted the mercantile system of accounting. It had credited subsidy receivable on 21.3.2002 and therefore, it was considered to be received on the said date. Accordingly, the appeal of the revenue was allowed. Thus, it would be apparent that the assessee apart from adopting mercantile system of accounting had chosen to take benefit of Section 80-IB of the Act and sought exemption. It had never taken the plea before the authorities below which is now sought to be raised that it was only liable to be assessed to the tune of ₹ 5,17,123/- which was actually received in the year concerned. As noticed neither was the certificate filed from the concerned General Manager, District Industries Centre when .....

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..... transport subsidy amounting to ₹ 16,11,477/- which was never received by the assessee and for which merely a claim was lodged with the Jammu Kashmir Government could be treated as income accrued and taxed in the hand of the assessee? Learned senior counsel for the appellant has vehemently argued that the above said amount was never received by the assessee and therefore it could not be treated as income in the hands of the assessee and placed reliance upon the Transport Subsidy Scheme, 1971 (hereinafter referred to as the Scheme ) circulated by the Jammu Kashmir Development Finance Corporation Limited (hereinafter referred to as the Corporation ) to submit that freight charges for movement was to be determined on the basis o .....

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..... the case of the assessee before the Tribunal as such nor before the assessing authority rather the benefit of Section 80-IB of the Act had been sought. Nil return had been filed and on re-opening after recording reasons by the assessing authority, the assessment order had been passed on 4.12.2009(Annexure A/2) and it had been noticed that the assessee had been adopting mercantile system of accounting and had credited subsidy receivable account with a sum of ₹ 21,28,603/- on 31.3.2002. Keeping in view the provisions of Section 80-IB the assessment officer held that subsidy received was an income incidental to industrial undertaking and had no direct nexus with it, and would not be eligible for deduction and the amount had been added a .....

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..... ds of the assessee. Two appeals were filed before the Tribunal by both the parties. On the basis of consensus arrived at, that benefit of rebate under Section 80-IB of the Act could not be granted, on the transport subsidy received in view of the judgment of the Apex Court in CIT Vs. Sterling Foods (1999) 237 ITR 579 (SC) and CIT Vs. Pandian Chemicals Ltd. 262 ITR 278 (SC) , the appeal of the assessee was dismissed. However, the Tribunal allowed the appeal of the revenue whereby the CIT had given the benefit of ₹ 16,11,480/- on account of the fact that the assessee had not filed any documentary evidence supporting its claim for the concerned assessment year and had adopted the mercantile system of accounting. It had credited subsi .....

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