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TMI Blog2011 (1) TMI 1441X X X X Extracts X X X X X X X X Extracts X X X X ..... is of capital in nature and deleting the addition whereas the A.O. treated it as revenue receipt relying on the decision of the Hon'ble Apex Court in the case of M./s. Sahaney Steel and Press Works Ltd. Vs. CIT (228) ITR 253)." 3. Briefly stated facts of the case are that the Assessing Officer relying on the decision of the Hon'ble Apex Court in the case of M/s. Sahaney Steel & Press Works Ltd. Vs. CIT, 228 ITR 253 treated the amount received by the assessee as west Bengal Industrial Promotion Assistance as 'revenue receipt' and on appeal, the Ld. CIT(A) following the decision of jurisdictional Kolkata ITAT's order in the case of Rasoi Ltd. Vs. DCIT in ITA No. 1080/Cal/98 dated 18.5.2001 and also the Hon'ble jurisdictional High Court's decision in the case of Klar Sehen P. Ltd. Vs. ITO treated the WBIPA as a capital receipt and directed the Assessing Officer to delete the additions for all the years under appeal. Aggrieved by the said order, now the revenue is in appeals before us. 4. At the time of hearing before us, the Ld. DR relied on the order of the Assessing Officer and urged before the bench to confirm the same. 5. On the other hand, the Ld. C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d Press Works Ltd.(supra). The Calcutta High Court in the case of CIT vs. Chindwara Fuels (supra) has followed the Apex Court decision. This decision has also been followed by Hon'ble ITAT, Kolkata in the case of East India Pharmaceuticals Works Ltd. (supra). The A.O in his assessment order simply quoted the case laws and held that WBIPA receipt is a capital receipt. The A.O has not analysed the facts nor compared the facts with the facts of the Supreme Court case (Sahney Steel & Press Works Ltd.(supra). On the other hand the Hon'ble ITAT, Kolkata has dealt this issue in a number of cases and held that the subsidy/assistance received from West Bengal Government is a capital receipt. Before I proceed to discuss the ITAT orders which are in favour of the appellant, I would first prefer to examine the facts of Sahney Steel & Press Work Ltd. (supra) wherein the Apex Court treated the subsidy as 'revenue' in nature. The Apex Court deeply examined the salient features of the scheme formulated by the Andhra Pradesh Government. It noticed the following conditions to be fulfilled for getting incentives: - Incentive is conditional upon commencement of production - Incenti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te have been passing through an acute financial crisis and it has been considered necessary to extend financial assistance to tide over such crisis for promotion of such industries, it has been decided in the public interest to formulate a scheme to allow financial assistance to the manufacturing units in West Bengal of such." It is clear from the above preamble to the Resolution that the scheme for allowing assistance to industries is to help them to tide over the financial crisis faced by the industries and for promotion of the industries themselves. The Scheme of the Govt. of West Bengal does not relate to new industries alone and rather allows benefit under the scheme to new as well as existing units pertaining to certain "industries". The purpose of the Scheme is definitely to remote the specified industries and to help the units under such industries to tide over the financial crisis being faced by the industries as such. There is nothing in the scheme which could be considered to help the industries in carrying on their operations on day to day basis. When financial crisis is faced by some business, pumping of fresh capital is required to! help the business to tide over suc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not find any reason to interfere with the order so passed by the learned Tribunal nor the order so passed by he learned Tribunal suffers from any legal infirmity nor we find any substantial question of law is involved in the appeal." 6.4 Decision: The facts of the case and the issue involved in the present case is similar to facts of the cases decided by the jurisdictional Kolkata Tribunal and High Court. I find in the later years (A.Y. 2001-02) in the appellant's own case my predecessor following the jurisdictional ITAT decisions [Rasoi Ltd., Mendine Pharm. Ltd. (supra)} held the WBIPA as capital receipt. I am also of the view that the sole purpose behind the grant of assistance is to tide over the financial crisis and promotion of industries and that both these activities are related to capital field and cannot be linked up with day to day operations of the appellant in any manner. Respectfully following the jurisdictional Kolkata ITAT and High Court decisions discussed earlier I treat WBIPA as a capital receipt and direct the A.O to delete the addition of Rs. 23,12,430/-. This ground of appeal of the revenue for all the three assessment years are dismissed. 7. The only g ..... X X X X Extracts X X X X X X X X Extracts X X X X
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