Subscription   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
CGST - Acts + GST Rates GST Ntf. GST Forms GST - Manual GST - FAQ State GST Acts SGST Ntf. I. Tax Manual
Extracts
Home List
← Previous Next →

Sun-N-Sand Hotel (Shirdi) Pvt Ltd. Versus DCIT Cir. 8 (3) , Aayakar Bhavan, Mumbai

Taxing of sales tax benefit received under power policy in respect of wind mills - revenue or capital receipt - application of " purpose test" - whether the said subsidy was for the purpose of giving an incentive to set up the infrastructure in the form of windmill to generate power in the State and not to meet the cost of the windmill? - Held that:- In the return of income for Ay 2005-06, the sales tax benefit related to the assessee’s wind farm project in Maharashtra, was treated by the assess .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ssue has been decided against the assessee by the Tribunal and the matter is admitted before the Hon’ble High Court. The assessee has filed declaration under section 158A(1) claiming that identical question of law is pending before the Hon’ble High Court and whatever may be the final decision on the question of law, the same shall be followed and assessee will not raise any question before any appellate authority or before the High Court under section 260A. - Decided against assessee. - Disa .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

nd modified. To this extent, we agree with the contention raised by the Ld. Counsel and direct the AO that, in so far as investment in partnership firm is concerned, which is a strategic investment, the same should be excluded from the working of the value of average investment as provided in Rule 8D(2)(iii). Accordingly, disallowance under section 14A r.w. Rule 8D(2) should be worked out after removing the investment made in partnership firm from the average investment. - Disallowance of cl .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

fter following the principle laid down by the Hon’ble jurisdictional High Court in the above case has decided this issue as held what was received by the assessee from the purchaser was a component of interest towards delayed payment of the price of the goods sold, supplied and delivered by the assessee. There could be no dispute about the position that the price realized by the assessee from the sale of goods manufactured by the price realized by the assessee from the sale of goods manufactured .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

t on account of the delay in payment of the sale price of the goods supplied by the undertaking partook of the same nature and character as the sale consideration - Decided in favour of assessee - ITA No. 2390/Mum/2014, ITA No. 2041/Mum/2014 - Dated:- 12-4-2016 - SHRI B R BASKARAN, ACCOUNTANT MEMBER AND SHRI AMIT SHUKLA, JUDICIAL MEMBER Appellant by : Shri Prakash Jotwani Respondent by : Shri A K Nayak ORDER PER AMIT SHUKLA, J. M.: The aforesaid appeals have been filed by the assessee agains .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

OF SALES TAX BENEFIT RECEIVED UNDER POWER POLICY IN RESPECT OF WIND MILLS: (a) On the facts and circumstances of the case and in law, the teamed Commissioner of Income-tax (Appeals) {C.I.T. (A)} erred in confirming the action of the Assessing Officer of treating the sales tax subsidy being sales tax benefit of ₹ 56,00 835/- as revenue receipt liable to tax which was received by the appellant under power Policy of the State Government as incentive for setting up windmills in the Maharashtra .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

eme Court in the case of CIT versus Ponni Sugars & Chemicals Ltd. [2008] 306 ITR 392 (SC)}, the same was in the nature of capital subsidy not liable to tax. Ground No. 2: DISALLOWANCE OF EXPENSES U/S. 14-A READ WITH RULE 8-D: (a) On the facts and circumstances of the case and in law, the ld. CIT(A) erred in not deleting the disallowance of ₹ 26,009/- made by the A.O. u/s. 14-A read with Rule 8-D instead directing him to make the disallowance as per Rule 8-D. (b) The ld. CIT(A) failed 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

ported in [2013] 38 taxmann.com 345 (Mumbai) for A Y 2009-10. Ground No. 3: DISALLOWANCE OF CLAIM FOR DEDUCTION U/S. 80- IA(iv) On the facts and circumstances of the case and in law, the ld. CIT(A) erred in confirming the disallowance of deduction under Section 80-IA (4)(iv) of the Act with reference to the interest income OF ₹ 15,583/- on delayed payment of sale proceeds made by the AO. The ld. CIT(A) erred in failing to appreciate that the interest was received by the appellant on the de .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ssue relating to ground No.1, that is, taxing of sales-tax subsidy of ₹ 56,00,850/- as revenue receipts instead of capital, it has been admitted by both the parties that, this issue has been decided against the assessee by the Tribunal and the matter is admitted before the Hon ble High Court. The assessee has filed declaration under section 158A(1) claiming that identical question of law is pending before the Hon ble High Court and whatever may be the final decision on the question of law, .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

on is that its ground of appeal against the CIT(A) confirming the additions made by treating sales tax benefit as revenue receipt in AY 2005-06, 2006-07 & 2008-09 respectively, is identical to the question of law involved in its appeal filed u/s 260A before the Hon ble Bombay High Court, For AY 2005-06, which is pending as on date. The year-wise additions made in respect of Sales-tax Subsidy are as under: AY 2006-07 Rs.74,67,780/- AY 2007-08 Rs.58,08,273/- AY 2008-09 Rs.56,00,835/- 3. On per .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

t. The CIT(A) and the ITAT confirmed the taxing of the said benefit as revenue receipt. 4. Similarly in AYs 2006-07, 2007-08 & 2008-09, the sale tax benefit of ₹ 74,67,780/-, ₹ 58,08,273/- & ₹ 56,00,835/- respectively, has been claimed to be capital receipt by the assessee, which has been taxed as revenue receipt in the assessment order. Hence, the agreement for transfer of sales tax incentive was with another concerns, M/s Jewel of India, M/s Padmashree Dr. V V Patil S .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

s pending appeal u/s 260A before the High Court in appeal No. ITXA/1167/2014 for AY 2005-06 (copies of statement of facts and question of law are enclosed). The only difference in the two appeals, as pointed in para No.7, is in the name of the purchaser of sales tax benefit and the amounts . Accordingly, ground no. 1 is treated as dismissed. 3. As regards the disallowance of expenditure under section 14A r.w. Rule 8D, the relevant facts are that, the assessee has shown dividend income from mutua .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ent and no share income has been received in this year and therefore, to the extent of investment made in partnership firm same should be removed from working of Rule 8D. In support, he relied upon the decision of Hon ble Bombay High Court in the case of CIT vs Delite Enterprises. 5. On the other hand, Ld. DR strongly relied upon the order of the CIT(A). 6. After considering the rival submissions and on perusal of the relevant finding given in the impugned orders of the authorities below, it is .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

n raised by the Ld. Counsel and direct the AO that, in so far as investment in partnership firm is concerned, which is a strategic investment, the same should be excluded from the working of the value of average investment as provided in Rule 8D(2)(iii). Accordingly, disallowance under section 14A r.w. Rule 8D(2) should be worked out after removing the investment made in partnership firm from the average investment. Thus, ground No.2 is decided accordingly. 7. As regards disallowance of claim of .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

eds and not on some fixed deposits. The allowability of deduction under section 80IA on such an interest, i.e. on delayed payment of sale proceeds stands covered by the decision of the Hon ble jurisdictional High Court in the case of CIT vs. Vidhyut Corporation [2010] 324 ITR 221 (Bom). The Tribunal also in AY 2009-10 in assessee s own case after following the principle laid down by the Hon ble jurisdictional High Court in the above case has decided this issue in the following manner: 6. After c .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

der dated 5th February 2008, the said company agreed to pay the interest on the arrears for the above period. The said interest was quantified on account of delayed payment of ₹ 10,41,315/- which was received on 30th August 2008. In the case before the Bombay High Court in Vidyut Corp. (supra), the assessee was an industrial undertaking eligible for deduction under section 80IB. It has received interest on delayed payment on sale price of its product had claim deduction under section 80IB .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

delivered by the assessee. There could be no dispute about the position that the price realized by the assessee from the sale of goods manufactured by the price realized by the assessee from the sale of goods manufactured by the industrial undertaking constituted a component of the profits and gains derived from the eligible business. The purchaser, on account of the delay in payment of the sale price also paid interest to the assessee. This formed a component of the sale price also paid intere .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

plicable to the facts of the present case and respectfully following the said decision of the High Court, we hold that the direction given by the learned Commissioner (Appeals) is legally and factually correct and the same is upheld. Thus, the grounds raised by the Revenue are dismissed . Accordingly, we direct the AO to verify the nature of delayed payment of sale proceeds and the interest thereon and then same ratio laid down by the Hon ble jurisdictional High Court decide the issue accordingl .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

es of the case and in law, the teamed Commissioner of Income-tax (Appeals) {C.I.T. (A)} erred in confirming the action of the Assessing Officer of treating the sales tax subsidy being sales tax benefit of ₹ 2,02,04,360/- as revenue receipt liable to tax which was received by the appellant under power Policy of the State Government as incentive for setting up windmills in the Maharashtra State. He further erred in not accepting the contentions of the appellant that the said receipt was a ca .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

was in the nature of capital subsidy not liable to tax. Ground No. 2: DISALLOWANCE OF EXPENSES U/S. 14-A READ WITH RULE 8-D: (a) On the facts and circumstances of the case and in law, the ld. CIT(A) erred in not deleting the disallowance of ₹ 9,57,983/- made by the A.O. u/s. 14-A read with Rule 8-D instead directing him to make the disallowance as per Rule 8-D. (b) The ld. CTT(A) failed to appreciate that the AO has neither recorded any satisfaction with regard to correctness of the claim .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 



|| 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