TMI Blog2015 (12) TMI 125X X X X Extracts X X X X X X X X Extracts X X X X ..... dy, in the form of insurance subsidy, on the other, received by the assessee-respondents. The resultant profits and gains, derived from, or derived by, an industrial undertaking, because of the insurance subsidy, have to be treated as deductible in terms of the provision of Section 80IB or 80IC - Decided in favour of Assessee. - ITA No. 980/Kol/2012, CO No.104/Kol/2013 - - - Dated:- 17-9-2015 - Mahavir Singh, JM And M Balaganesh, AM For the Petitioner : Shri B Mukhopadhyay, JCIT, Sr. DR For the Respondent : Shri S Jhajharia, FCA ORDER Per Shri Mahavir Singh, JM This appeals by revenue is arising out order of CIT(A), Shillong in appeal No. Shill-80/2007-08 dated 01.11.2011. Assessment was framed by ACIT, Circle-Shi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsport subsidy of ₹ 95,50,289/- and interest subsidy of ₹ 3,77,156/- and in view of the facts and in the circumstances the appellant is fully eligible for deduction u/s. 80IC on the aforesaid sums and in view of the facts and in the circumstances it may kindly be held accordingly. 3. Briefly stated facts are that the assessee is engaged in the business of manufacturing of iron and steel products. The assessee Meghalaya Sova Ispat Alloys (P) Ltd. is a Public Limited Co. having its registered office and factory at EPIP, Byrnihat gate No. 6 in Ri-bhoi district, Meghalaya. That the Ministry of Industry, Department of Industrial Policy and promotion, Government of India, declared a special package for North East Region for indus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1997 is issued by the Govt. of Meghalaya through Meghalaya Industrial Development Corporation Ltd. Shillong through Eligibility Certificate bearing Ref. No. MIDC (Gen) 368/2001/Pt/III/Registration/3058 Dt. 04/11/2004. In view of the above, the assessee claimed deduction u/s. 80IC of the Act on the following items: (i) Transport subsidy ₹ 95,50,289/- (ii) Interest subsidy ₹ 3,77,156/- (iii) Insurance claim ₹ 9,52,000/- (iv) Receipt from sale of salvages from fire ₹ 3,25,988/- 4. But the AO has not allowed the claim of deduction and adde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated as income derived from the industrial undertaking and deduction u/s. 80IC should be allowed in respect of the same. But, he disallowed the claim of deduction u/s. 80IC of the Act, on transport subsidy and interest subsidy. Aggrieved against the allowance of deduction, revenue came in appeal and against the disallowance of deduction assessee came in appeal before Tribunal. 5. We have heard rival submissions and gone through facts and circumstances of the case. We find that this issue is now squarely covered in favour of assessee and against the revenue by the decision of Hon ble Guwahati High in the case of CIT Vs. Meghalaya Steels Ltd. Pride Coke Pvt. Ltd. (2013) 356 ITR 235 (Gau), wherein it has been held as under (from Head ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsport subsidy, on the one hand, and the profits earned and gains made, by the industrial undertakings, on the other. Such a direct nexus could not be termed as the first degree nexus between the two, namely, the transport subsidy, on the one hand, and the resultant profits and gains on the other. (b) The Industrial Policy, 1997, as extended by the Industrial Policy of Assam, 2003, provided for power subsidy to be given to eligible industrial units for a period of 5 years from the date of commercial production, the power subsidy being available in the form of reimbursement of fully paid power bills with certain ceiling. When the cost of production is reduced by granting subsidy on electricity charges, it necessarily helps the industry ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al Comprehensive Insurance Scheme, 1997. Under the scheme, the insurance premium paid by the eligible industrial units, set up in the North Eastern Region were reimbursed by the nodal insurance company. The insurance subsidy helped in reducing the running cost of the industrial unit concerned establishing thereby direct and first degree nexus between the industrial activities of the assessee concerned, on the one hand, and the subsidy in the form of insurance subsidy, on the other, received by the assessee. The resultant profits and gains, derived from, or derived by, an industrial undertaking, because of the insurance subsidy, had to be treated as deductible in terms of the provisions of section 80-IB or section 80- IC, as the case may be. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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