TMI Blog2015 (10) TMI 2764X X X X Extracts X X X X X X X X Extracts X X X X ..... re, relying on our finding given in the case of Bhushan Limited [ 2015 (6) TMI 1195 - ITAT CHANDIGARH] we hold that the sales tax subsidy received by the assessee is capital in nature. - ITA No.392/Chd/2007, 592/Chd/2007, 824/Chd/2007, 773/Chd/2012, 283/Chd/2014, 911/Chd/2013, 897/Chd/2006, 341/Chd/2007, 756/Chd/2011, 896/Chd/2006 - - - Dated:- 21-10-2015 - Shri H.L.Karwa, Vice President And Ms. Rano Jain, Accountant Member Department by: S/Shri Subhash Aggarwal, Vineet Jain, Shri S.K.Mittal, DR Assessee by: Shri Rajesh Garg ORDER Rano Jain, This bunch of ten appeals filed by the different assessees and Department are directed against the separate orders of the learned Commi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd. (supra), however in the case of CIT Vs. Ponny Sugars Chemicals Ltd., 306 ITR 39 (SC), the Hon'ble Apex Court has held that whether the subsidy is a revenue or capital receipt would depend upon the nature and purpose of the subsidy. In this view, the appeals are restored to the Tribunal to adjudicate the nature and purpose of sales tax subsidy and, thereafter record their opinion whether it is a capital or revenue expenditure after taking into consideration the judgment of the Hon'ble Supreme Court in the case of Ponny Sugars Chemicals Ltd. (supra). 5. Now, the only issue to be decided by us is whether the amount of ₹ 5,47,60,997/- received by the assessee from the Government of Gujarat as sales tax Subsidy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Government of Gujarat under the New Incentive Policy-Capital investment Incentive to Premier/Prestigious Unit Scheme 1995-2000 . Therefore, in order to compare the policies of two different States, we have very carefully gone through the schemes of both the Governments produced before us. Since as per the directions of the Hon'ble High Court, we have to judge the nature and purpose of the sales tax subsidy received by the assessee. We see that the scheme of the Gujarat Government has aimed to trigger off accelerated industrial development and economic growth. For this purpose, to provide special package to certain types of industries, the scheme was formulated. To be eligible to get the benefit of this scheme mainly the criteria has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Hon'ble Supreme Court in the case of Ponni Sugars Chemicals Ltd. (supra) considering its earlier decision in the case of Sahney Steels Press Works Ltd.(supra) directed that the test is that the character of the receipt in the hands of assessee has to be determined with respect to the purpose for which subsidy is given. In other words, in such cases, one has to apply the purpose test. The point of time at which subsidy is paid, is not relevant. The source is immaterial. The form of subsidy is immaterial. 25. Considering the facts of the case and the West Bengal Incentive Scheme, 1999 in the light of the judgement of the Hon'ble Supreme Court in the case of Ponni Sugars Chemicals Ltd. (supra), it is clear that the uni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the sales tax subsidy in the hands of assessee was capital in nature. The decisions relied on by ld. DR would not support the case of the revenue. The decision cited by ld. counsel for the assessee clearly support the submission of ld. counsel for the assessee that the sales tax subsidy received by the assessee are capital in nature. We may also note here that the same scheme under West Bengal Incentive Scheme, 1999 under reference was subject matter of consideration before ITAT Kolkatta Bench in the case of Keventer Agro Ltd. (supra) and the Tribunal also decided the issue in favour of the assessee holding that the West Bengal Incentive Scheme, 1999 categorically encourage the promotion of industries in the State of West Bengal. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Indian Acrylics Limited) 11. In these cases, the assesses have received sales tax subsidy from Punjab Government under the scheme named, Industrial Policy Incentive Code, 1996 . We have gone through the said policy and found that the scheme though not verbatim as that of West Bengal or Gujarat schemes, but the sum and substance of all these schemes are the same, therefore, relying on our finding given in ITA No.773/Chd/2012, we hold that the sales tax subsidy received by the assessee is capital in nature. 12. In the result, all the appeals filed by the assessee s are allowed while Revenue s appeals are dismissed. Order pronounced in the open court on this 21 st day of October, 2015. - - TaxTMI - TMI ..... X X X X Extracts X X X X X X X X Extracts X X X X
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