TMI Blog2015 (7) TMI 784X X X X Extracts X X X X X X X X Extracts X X X X ..... ch the subsidy is given are irrelevant. This Court concurs with the views expressed by the CIT (A) and the ITAT that any refund or drawback would go to ultimately reduce the cost of the project and had therefore to be treated as a capital receipt. See Challapalli Sugars Ltd. v. CIT [1974 (10) TMI 3 - SUPREME Court] and CIT v. Bokaro Steel Ltd [1998 (12) TMI 4 - SUPREME Court] - Decided against revenue. - ITA 5/2015 - - - Dated:- 21-7-2015 - S. Muralidhar And Vibhu Bakhru,JJ. For the Appellant : Mr. P. Roy Chaudhuri, Senior Standing counsel with Mr. Ajit Sharma, Junior Standing counsel For the Respondent : Ms. Shashi M Kapila, Advocate with Mr.R.R. Maurya, Mr. Pravesh Sharma and Mr.Sanjay Kumar, Advocates ORDER ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of India for grant of mega power status which was under examination during the AY 2009-10. The project was at the stage of construction and installation of power plants, pending the grant of mega power status. The Assessee was required to pay excise and customs duty on goods and materials wherever applicable. Accordingly, the Assessee paid excise duty of ₹ 2606.45 lakhs to its vendors. It lodged a claim for ₹ 1246.29 lakhs with the DGFT under para 8.2(g) of the Foreign Trade Policy as deemed export benefits . The DGFT by a letter dated 24th February 2009 admitted the claim of the Assessee to the extent of ₹ 1059.35 lakhs but had not yet reimbursed the said amount to the Assessee in the AY in question. It is stated that, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich deals with cash assistance to exporters. Mr. P. Roy Chaudhuri, learned counsel for the Revenue sought to clarify that this was perhaps a typographical error and the AO might have intended to refer to Section 28(iiic) which refers to any duty of customs or excise repaid or repayable as drawback to any person against exports under the Customs and Central Excise Duties Drawback Rules, 1971 . 7. The factual position as regards the actual dates of commencement of commercial operation of the two units of the thermal power plant were 1st September 2011 and 24th July 2012 respectively. The CIT (A) accepted this fact and this was affirmed by the ITAT as well. This factual position has not been challenged by the Revenue. It is therefore, not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on money borrowed by a newly started company which was in the process of constructing and erecting its plant can be capitalised and added to the cost of the fixed assets which have been created as a result of such expenditure . 10. In CIT v. Bokaro Steel Ltd [1999] 236 ITR 315, the Supreme Court was considering the nature of the amounts received by the Assessee from its contractors, engaged for the construction of its steel plant, under three heads: (i) as rent for housing the workers and staff, (ii) hire charges for plant and machinery made available to the contractors and (iii) interest from advances made to the contactors. The Court found that the arrangements between the Assessee and its contractors pertaining to the above three rec ..... X X X X Extracts X X X X X X X X Extracts X X X X
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