TMI Blog2015 (4) TMI 944X X X X Extracts X X X X X X X X Extracts X X X X ..... ed against the assessee and in favour of the Revenue in view of the decision of Sahney Steel & Press works Ltd. (supra). Under the circumstances, the learned Tribunal has materially erred in treating the amount of subsidy of ₹ 19,82,600/- as capital in nature and has materially erred in quashing and setting aside the order passed by the Assessing Officer confirmed by the learned CIT(A). - Decided in favour of revenue. - Tax Appeal No. 1240/2006 - - - Dated:- 8-4-2015 - M. R. Shah And S. H. Vora,JJ. For the Petitioner : K M Parikh, Adv. For the Respondent : None ORDER (Per : Honourable Mr. Justice M. R. Shah) 1. Feeling aggrieved and dissatisfied with the impugned judgment and order passed by the learned Income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inancial Corporation on behalf of the State Government. It also revealed that the said subsidy was to be disbursed in installment after fixed assets of the proposed project was acquired and paid before 01.04.1986. The condition as per the approval letter of the subsidy shall be discussed hereinafter. That thereafter, the Assessing Officer treated the subsidy of ₹ 19,82,600/- as revenue receipt and it added to the income of the assessee, relying upon the decision of the Hon'ble Supreme Court in the case of Sahney Steel and Press works Ltd. and others V/s. Commissioner of Income Tax reported in (1997)228 ITR 253. 3.1. Feeling aggrieved and dissatisfied with the order of assessment passed by the Assessing Officer in treating the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Receipts) liable to income tax? 4. Shri K.M. Parikh, learned advocate appears on behalf of the Revenue. Though served, nobody appears on behalf of the respondent - assessee. 5. Shri Parikh, learned advocate appearing for the Revenue has vehemently submitted that in the facts and circumstances of the case, the learned Tribunal has materially erred in holding the amount of subsidy as capital in nature. It is submitted that the learned Tribunal has materially erred in following the decision of the co-ordinate bench in ITA No.3565/Ahd/2003 and 1721/Ahd/2005 in holding that the amount of subsidy was capital in nature. It is submitted that, as such, while following the decision of the co-ordinate bench in ITA No.3565/Ahd/2003 and 1721/Ahd/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all within the law laid down by the Hon'ble Supreme Court in the case of Sahney Steel and Press works Ltd. (supra). It is submitted that, therefore, the learned Tribunal has materially erred in treating the subsidy amount of ₹ 19,82,600/- as capital in nature and has materially erred in quashing and setting aside the order passed by the Assessing Officer as well as the learned CIT(A) treating the subsidy amount of ₹ 19,82,600/- as revenue in nature. 6.2. Making the above submissions, it is requested to allow the present appeal and answer the question in favour of the Revenue and against the assessee. 7. Heard Shri Parikh, learned advocate appearing for the Revenue and perused and considered the order passed by the Asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deration. It has come on record that out of the aforesaid amount of ₹ 19,82,600/-, which was paid to the assessee by way of subsidy, ₹ 8,82,600/- was deducted directly as interest on loan from the Gujarat State Financial Corporation and a sum of ₹ 11 lacs was paid to the Gujarat Industrial Coopertive Bank Ltd., Ankleshwar on 13.02.1996. It has also come on record that thus, the assessee received subsidy after production was commenced. The purpose of subsidy does not seem to buy any capital asset or for establishment of project. In the backdrop of the aforesaid facts, the substantial question of law raised/involved in the present tax appeal is required to be considered. 8. In the case of Sahney Steel and Press works Ltd. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Press works Ltd. (supra), the subsidy amount of ₹ 19,82,600/- received by the assessee - company in the year under consideration is to be treated as revenue receipt/revenue in nature and the same was required to be included in the income of the assessee. 9.1. From the impugned order passed by the learned Tribunal, it appears that the learned Tribunal has allowed the appeal preferred by the assessee and has held the amount of subsidy of ₹ 19,82,600/- as capital in nature solely relying upon and considering its earlier decision in ITA No.3565/Ahd/2003 and 1721/Ahd/2005. However, the learned Tribunal has materially erred in not properly appreciating the distinguishable facts in both the cases. 10. Under the circumstances and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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