TMI Blog2014 (1) TMI 1723X X X X Extracts X X X X X X X X Extracts X X X X ..... .7.2013 of the Ld CIT(A)-I, Ludhiana. 2. In this appeal the assessee has raised the following effective grounds: 2 That the Ld. CIT(A) has erred in testing the sales tax subsidy of ₹ 7,62,72,378/- as Revenue receipt and not capital receipt as claimed by the assessee. 3 That the Ld. CIT(A) has erred in law and on facts in allocating ₹ 1,09,281/- as per Rule 8D ignoring the contentions raised by the assessee. 3 Ground No. 2 - After hearing both the parties we find that during assessment proceedings the Assessing officer noticed that the assessee had received sales tax subsidiary amounting to ₹ 7,62,72,378/- which was treated as capital receipt. The assessee was asked that why decision of Hon'ble Jurisdictional High Court in case of CIT Vs. Abhishek Industries, 286 ITR 1 should not be followed and a detailed representation was made by the assessee. However, the Assessing officer was not satisfied and following the decision of Hon'ble Punjab and Haryana High Court in case of CIT Vs. Abhishek Industries (supra) treated the sum of ₹ 7,62,72,378/- as revenue income. 4 On appeal the action of the Assessing officer was confirmed by the LD. CI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... raised in assessment years 2003-04 2004-05 before the Hon'ble Punjab Haryana High Court were identical to the issue raised in the assessment year 2005-06. 11. The contention of the learned A.R. for the assessee now before us, however, is that the issue is covered in favour of the assessee in view of the ratio laid down by the Hon'ble Supreme Court in Ponni Sugars Chemicals Ltd. Vs. CIT (supra) with regard to the taxability of incentives bestowed to new/extended sugar factory. It was pointed out by the learned A.R. for the assessee that the Hon'ble Apex Court in Ponni Sugars Chemicals Ltd. Vs. CIT (supra) following the earlier decision of the Hon'ble Supreme Court in Sahney Steel Press Works Ltd. (supra) had held that the subsidy received by the assessee was in the nature of capital receipt, since the object behind the same was setting up of new unit/expansion of existing business. Further reliance was placed on the decision of the Calcutta High Court in CIT Vs. Rasoi Ltd. (supra) pointing out that the taxability of the receipts given by way of subsidy, essentially boils down to the purpose for which the subsidy was granted. The contention of the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sing the scheme under consideration, which scheme is not before us. The learned A.R. for the assessee has failed to point out the contents of the earlier scheme of State of Gujarat and whether the scheme under consideration for the year under appeal is similar to the earlier scheme of State of Gujarat. In the absence of the same, we find no merit in the reliance placed upon the decision of the Hon'ble Gujarat High Court in CIT Vs. Birla VXL (supra) and the plea of the assessee that the facts of the case are squarely covered by the said decision. It may also be brought on record that the assessee itself in the preceding year i.e. assessment year 2005-06 had filed a declaration under section 158A(1) of the Act and it was pointed out that the issue was identical to the issue raised in assessment years 2003-04 and 2004-05, where the appeal of the assessee was pending before the Hon'ble High Court. Request was made before us to apply the decision of the Hon'ble High Court in assessment years 2003-04 and 2004-05 to the issue raised in assessment year 2005-06. In view of the above said facts and circumstances and respectfully following the earlier order of the Tribunal in asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9;ble High Court regarding environment protection measures. Since no income was to be received, therefore Sec 14A could not have been invoked. 12 On the other hand, the Ld. D.R. for the Revenue strongly supported the order of the Ld. CIT(A). 13 We have gone through the rival submissions carefully. It is not disputed that investment of ₹ 164.75 lakhs has been made in BEIL. From page 30 of paper book which gives the over view of the objects of BEIL reads as under: NCTL Overview Narmada Clean Tech Ltd. (NCTL) formerly known as Bharuch Eco Aqua Infrastructure Ltd. (BEAIL) is a company subsidiary of Gujarat Industrial Development Corporation (GIDC) and jointly promoted by Member Industries of Ankleshwar, Jhagadia and Panoli Industrial Estates. The objective is to receive the industrial effluent Treatment Plant (FETP) upto marine standards and then to convey deep into the sea. VC MD-GIDC is the Chairman of NCTL. Ever since the issues of Environment Protection become a priority agenda across the world, Indian Government Gujarat Government has joined the international community in its commitment towards Environment Protection Program. The priority accorded t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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