Subscription   Feedback   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Articles Highlights TMI Notes SMS News Newsletters Calendar Imp. Links Database Experts Contact us More....
Extracts
Home List
← Previous Next →

LG Electronics India Pvt. Ltd. Versus ACIT, Circle-2, A-2D, Sector-24, Noida.

Revision u/s 263 - assessment order treating the subsidy from the Government of Maharashtra as capital receipt is erroneous and prejudicial to the interest of the Revenue - Held that:- Now subsidy given by the Central Government or a State Government or any authority etc. for any purpose, except where it is taken into account for determination of the actual cost of the asset under Explanation 10 section 43(1), has become chargeable to tax. Even if a subsidy is given to attract industrial investm .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

from the Government of Maharashtra is a capital receipt and accordingly not chargeable to tax. - It is a settled legal position that if two views are possible on a particular point and the Assessing Officer has taken one of such possible views, it is not open to the CIT to treat the assessment order erroneous and prejudicial to the interest of the Revenue and impose the other possible view as against the one canvassed by the Assessing Officer. The discussion made in the preceding paras amply .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Kumar, Advocates For The Deptt. : Shri Naveen Chandra, CIT, DR ORDER PER R.S. SYAL, VP: This appeal by the assessee is directed against the order dated 30.03.2015 passed by the CIT u/s 263 of the Income-tax Act, 1961 (hereinafter also called the Act ) in relation to the assessment year 2008-09. 2. Briefly stated, the facts of the case are that a return declaring total income of ₹ 337.00 crore and odd was filed by the assessee on 25.9.2008. Assessment in this case was completed u/s 143(3) .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

idy received from the Government of Maharashtra was a revenue receipt and hence chargeable to tax. Characterizing the assessment order as erroneous and prejudicial to the interests of the Revenue, he revised the assessment order and directed the Assessing Officer to include the amount of such subsidy in the total income. The assessee is aggrieved against this order. 3. We have heard the rival submissions and perused the relevant material on record. The short question before us is as to whether t .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ry to less developed areas of the State and increase in employment. The Government formulated a scheme for providing refund of VAT to new units/units undertaking expansion within the State of Maharashtra. The relevant text of Industrial Policy of Maharashtra, 2001 is available on page 138 of the paper book. The objective of the Scheme as given in its para 2.0, reads as under:- In the phase of second generation economic reforms, the objective of Maharashtra Industrial Policy 2001 is to further ac .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

olution dated 31.03.2001 as Maharashtra PSI Scheme 2001. A copy of such Notification is available from page 153 onwards of the paper book. The said Package Scheme of Incentives, 2001 was amended vide Government Resolution dated 02.06.2005, whose copy is available from page 187 onwards of the paper book. The introduction part of this Resolution dated 2nd June, 2005 elaborates that Incentive Scheme 2001 is in existence and special incentives to the medium and large-scale industrial units were to b .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

paper book. Under this MoU, the assessee undertook to make additional investment of around ₹ 535 crore over and above the investment made as on 11th August, 2005, towards further expansion of the existing project at Ranjangaon, Pune and also to generate additional employment of 2000 persons by 2010. The State Government, in turn, offered the following incentives to the assessee:- 2.2.1. Exemption from payment of Electricity duty for 15 years. 2.2.2. Industrial Promotion Subsidy to the exte .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ount of benefits availed at 2.2.1 above over a period of 7 years. The modalities of paying the subsidy amount will be determined shortly. 6. On going through the relevant clauses of the Incentive Scheme and MoU, it emerges that the assessee agreed to make additional investment in the Maharashtra State and also undertook to give additional employment and, as a quid pro quo, the Government agreed to allow exemption from payment of electricity duty and subsidy to the extent of 75% of the fixed capi .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

purpose of the grant and not the mode of its discharge. The relevant consideration in this regard is, therefore, the purpose test. If the purpose or object of a Scheme is the setting up new industry or its expansion, then, the subsidy so received assumes the character of a capital receipt irrespective of the form in which it is disbursed. The Hon'ble Supreme Court in the case of CIT vs. Ponni Sugars and Chemicals Ltd. (2008) 306 ITR 392 (SC), has laid down to this extent. On the other hand, .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

nsion of industry falls in the realm of Capital receipt which is not chargeable to tax. 7. Adverting to the facts of the instant case, we find that the assessee received the extant subsidy for accelerating flow of investment in industry in the State of Maharashtra i.e., for expansion of the industry. The subsidy resulting from such industrial expansion is ex consequenti governed by the judgment of the Hon'ble Supreme Court in the case of Ponni Sugars and Chemicals Ltd. (supra) and, hence, a .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

vs. ACIT (ITA No.814/Mum/2007), vide its order dated 04.12.2009, has held such subsidy to be capital in nature. A copy of such order has been placed from page 570 onwards of the paper book. Similar view has been taken by the Pune Bench of the Tribunal in the case of Rohit Exhaust Pvt. Ltd. vs. ACIT in ITA No.1880/Pn/2013. A copy of such order dated 31.03.2015 is also available from page 608 of the paper book. The Delhi Bench of the Tribunal in Indo Rama Synthetics (I) Ltd. vs. ACIT (ITA No.2002/ .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

deal with such a situation, the Finance Act, 2015, w.e.f. 1-4-2016, has enlarged the definition of income given u/s 2(24) by inserting sub-clause (xviii), which reads as under:- (xviii) assistance in the form of a subsidy or grant or cash incentive or duty drawback or waiver or concession or reimbursement (by whatever name called) by the Central Government or a State Government or any authority or body or agency in cash or kind to the assessee other than the subsidy or grant or reimbursement wh .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 

what is new what is new
  ↓     Latest Happenings     ↓  

Forum: GST on RCM on rent in a unregistered state

Forum: COMPOSITION SCHEME

Article: Websites of Government Departments need lot of improvement. We are noticing detoriations in them for example, case of website of ITAT.

Highlight: Levy of additions tax u/s 115O on distribution of dividend - shares of its profits declared as distributable among the shareholders is not impressed with the character of the profit from which it reaches the hands of the shareholder - not to be bifurcated as agriculture and non-agriculture dividend - SC

Highlight: Rate of GST on old and scrap buses - 28% or 18% - at such initial tender process initiated by the Respondents-KSRTC, the present petitions filed by the petitioners are premature and misconceived and do not require any interference by this Court at this stage. - HC

Forum: Rent a cab operator

Highlight: In view of amendment made u/s 132A of the Income Tax Act, 1961 by Finance Act of 2017, the 'reason to believe' or 'reason to suspect', as the case may be, shall not be disclosed to any person or any authority or the Appellate Tribunal, SC dismissed the appeal of the assessee

Highlight: Validity of Assessment Order - period of limitation u/s 153 (2A) is applicable even if the entire order was not set aside but matter was remanded back for for limited aspects with directions - HC

News: Note ban was a shake-up, achieved its main objectives

Notification: Amendments in the notification No.5/2017- Integrated Tax (Rate) dated the 28th June, 2017.

Highlight: Levying interest u/s 234C - interest is to be charged on the returned income and not on assessed income.

Highlight: Accrual of income - sale of right to develop and sell incentive FSI under LOI - till the conditions of LOI are fulfilled transfer is not complete and income does not accrue to the assessee

Highlight: TPA - determination of ALP - TP adjustment by applying Bright Line Test (BLT) is not sustainable on protective basis having no statutory mandate.

Highlight: Safeguard Duty - Advance License Scheme - as there is no exemption from safeguard duty leviable under Section 8C, which is imposed on the goods imported from China, the importer has to pay safeguard duty

Highlight: Manufacture - process of cutting of waste plastic container - Such plastic containers before and after cutting are nothing but waste / scrap - Not a manufacturing activity as no new product emerges.

News: NITI Aayog and Govt. of Assam organizes workshop on health sector reforms in Guwahati; launches SATH- Sustainable Action for Transforming Human Capital

Notification: Seeks to amend notification no. 5/2017- central tax(rate) dated 28.06.2017 to give effect to gst council decisions regarding restriction of refund on corduroy fabrics

Notification: Seeks to amend notification no. 2/2017- central tax(rate) dated 28.06.2017 to give effect to gst council decisions regarding gst exemptions

Forum: GSTR 3B Rectification

Notification: seeks to exempt Skimmed milk powder, or concentrated milk

Notification: Seeks to amend notification no. 2/2017- integrated tax(rate) dated 28.06.2017 to give effect to GST council decisions regarding GST exemptions.

Forum: 3B mistake

Notification: Seeks to amend notification no. 1/2017- central tax(rate) dated 28.06.2017 to give effect to gst council decisions regarding gst rates

Notification: Seeks to amend notification no. 1/2017- integrated tax(rate) dated 28.06.2017 to give effect to gst council decisions regarding gst rates.

Forum: GST - TRAN1 - filed - Data uploaded with Remarks Processed with Error - Not coming in Electronic credit ledger - need suggession guidance

News: Notification Issued For GST Actionable Claim On Branded Food Products

Highlight: Classification printed computer stationary/manifold Business Forms - to be classified under Chapter Heading 4820.00 or under Chapter Heading 4901.90 - items like A4 sheets, advertisement and job card to be classified under Chapter 49

Forum: GST Invoice

Article: RCM Applicability to persons not liable to get registered us 23(1)

Article: Credit of unsold stock [Section 140(3)] - Actual Credit as well as Notional Credit - Part-I - GST Transitional provisions

News: GST Refund - Blockage of Working Capital of Exporters - earlier also there was a normal blockage of funds for a period of 5-6 months at least

News: Clarification about Transition Credit - ₹ 1.27 lakh crore of credit of Central Excise and Service Tax was lying as closing balance as on 30th June, 2017 - claim of credit of ₹ 65,000 crore is not unexpected

Article: 20 Things You must know about E Way Bills in GST Law

Article: MISTAKES IN DRAFTING

Forum: Duty Drawback- Urgent

Highlight: The Customs and Central Excise Duties Drawback Rules, 2017 and All Industry Rates (AIRs) of Drawback related changes -reg. - Circular

Highlight: The definition of "subsidiary company" or "subsidiary" u/s 2(87) of the Companies Act, 2013 shall come into force w.e.f. 20-9-2017

Highlight: Central Government notified the All Industry Rates of Duty Drawback Schedule w.e.f. 1.10.2017 - Notification

Notification: All Industry Rates of Duty Drawback Schedule w.e.f. 1.10.2017

Circular: Investment by Foreign Portfolio Investors in Corporate Debt Securities Review

Notification: Exemptions on supply of services under UTGST Act

Notification: Rates for supply of services under UTGST Act

Notification: Exemptions on supply of services under IGST Act

Notification: Rates for supply of services under IGST Act

Notification: List of Exempted supply of services under the CGST Act

Notification: Rates for supply of services under CGST Act

Highlight: Acceptance of deposits by companies from its members - conditions relaxed in case of Specified IFSC Public company and a private company - Rule 3 amended

Notification: Rate of exchange of conversion of the foreign currency with effect from 8th September, 2017

News: Tax Payers Advised To Confirm Identities Of Income Tax Search Authorities

Notification: Amendment in Appendix 3 (SCOMET items) to Schedule- 2 of ITC (HS) Classification of Export and Import Items 2012



|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version