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TMI Blog2020 (11) TMI 418X X X X Extracts X X X X X X X X Extracts X X X X ..... ng and selling of Industrial/Medical Gases. Return was filed declaring total income of Rs. 135.08 crore. During the course of assessment proceedings, the Assessing Officer (AO) observed that the assessee received capital subsidy of Rs. 19,21,02,802/- from the Governments of Jharkhand and Maharashtra which was taken directly to the Capital Reserve in the balance sheet. Since this amount was not offered for taxation, the AO called upon the assessee to state reasons for this stand. The assessee submitted the reasons in the shape of Note and written submissions by precisely putting forth that it received subsidy for setting up new industrial units in Bokaro and Jejuri, which was a capital receipt and hence not chargeable to tax. Not convinced, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The ld. DR fairly conceded that the facts and circumstances for the extant year are similar. He, however, tried to highlight that the Tribunal did not consider certain important facets of the issue in its earlier order. On a specific query, it was fairly admitted that the order passed by the Tribunal in assessee's own case for the immediately preceding assessment year has neither been modified nor reversed by the Hon'ble High Court. Respectfully following the precedent, we determine this issue in favour of the assessee and uphold the impugned order to this extent. 4. The only issue raised in the assessee's appeal is against the direction of the ld. CIT(A) for reducing the amount of subsidy from the value of assets for the purpose of grant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o talks of "such subsidy", which again traces its origin to the main part of the Explanation 10 that, in turn, refers to meeting cost of an asset directly or indirectly by the Government etc. Au contraire, where the subsidy is given for industrial development and not for meeting cost of an asset by the Government etc., the same cannot be brought within the purview of Explanation 10. The Hon'ble Bombay High court in Pr. CIT Vs. M/s. Welspun Steel Ltd. (2019) 264 Taxman 252 (Bom.) has taken similar view in deciding question no. (b) raised before it and held that the Tribunal was justified in holding that subsidy cannot be considered as a payment directly or indirectly to meet any portion of the actual cost. The assessee in that case also got ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 10 to clause (1) of section 43; or (b) the subsidy or grant by the Central Government for the purpose of the corpus of a trust or institution established by the Central Government or a State Government, as the case may be;' 8. The Finance Act, 2018 w.r.e.f. 1.4.2017 substituted sections 145A and 145B for section 145A. Relevant part of the newly inserted section 145B reads as under:- Rs. 145B. (1)..... (2) .... (3) The income referred to in sub-clause (xviii) of clause (24) of section 2 shall be deemed to be the income of the previous year in which it is received, if not charged to income-tax in any earlier previous year.' 9. Now with the above amendments, subsidy falls within the definition of `income' u/s 2(24) and result ..... X X X X Extracts X X X X X X X X Extracts X X X X
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