TMI Blog2019 (2) TMI 1888X X X X Extracts X X X X X X X X Extracts X X X X ..... ments [ 2017 (6) TMI 1124 - ITAT DELHI] . In view of the express judicial fiat available in this regard, the disallowance computed under s.14A cannot be imported for the purposes of adjustment in book profit u/s1 15JB of the Act. The issue raised by the assessee in this regard thus stands allowed. Additional depreciation in respect of air conditioner machines and finger recognition system - assessee submitted that the ai r conditioners were installed with the factory premises and the finger recognition system is for the supervision and control of the employees attendance - HELD THAT:- Both the assets are in the nature of plant and machinery and thus qualify for additional depreciation under s.32(1)(iia) of the Act. For this proposition, the learned AR for the assessee referred to the decision of Hon ble Gujarat High Court in CIT vs. Nathubhai H Patel [ 2005 (11) TMI 49 - GUJARAT HIGH COURT] - We find force in the plea of the assessee noted above. The assessee cannot be denied additional depreciation in the facts narrated above. The aforesaid issue is thus settled in favour of the assessee. Interest subsidy is required to be treated as capital receipt of non-taxable natur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ect on the disputed issues raised by the Revenue is stated to be not exceeding ₹ 20 lakhs and therefore appeal of the Revenue is required to be dismissed in l imine. 5. The Learned DR for the Revenue fairly admitted the applicability of the CBDT Circular No. 3 of 2018. Accordingly, appeal of the Revenue is dismissed as not maintainable. However, it will be open to the Revenue to seek restoration of its appeal on showing inapplicability of the aforesaid CBDT Circular in any manner. 6. In the result, the appeal of the Revenue is dismissed. 7. Now, we turn to Cross Objection filed by the assessee in Revenue s appeal in CO No.145/Ahd/2016. 8. The first object ion of the assessee concerns disallowance sustained by the CIT(A) under s.14A of the Act to the extent of exempt income i.e. ₹ 5,67,276/ -. The learned AR for the assessee submitted that the total disallowance under s.14A of the Act was worked out by the AO at ₹ 44,08,465/- comprising of ₹ 40,43,049/ - towards proportionate interest disallowance under Rule 8D(2) (ii) and remaining ₹ 3,65,416/- under Rule 8D(2) (i ii ) of the Income Tax Rules. The CIT(A) in first appeal has restricted the d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not be denied additional depreciation in the facts narrated above. The aforesaid issue is thus sett led in favour of the assessee. 11. We shall now turn to the additional ground raised by the assessee in its cross objection which reads as under: On the facts and the circumstances of the case and in law, the interest subsidy of ₹ 2,16,45,161 received by the assessee under Technology Upgradation Fund Scheme (TUFS) for Textile and Jute industries during the above assessment year should be treated as capital receipt. 11.1 The additional ground has been admit ted to adjudicate the legal issue in the light of the available view taken by the co-ordinate bench in DCIT vs. M/s. Adani Gas Ltd. ITA Nos. 775/Ahd/2014 Ors. order dated 17.10.2018. The relevant operative para of the order of the coordinate bench is reproduced hereunder : 21.4 A legal issue also cropped up in the course of hearing as to whether additional ground could be raised in a cross objection filed by the assessee under s.253(4) of the Act. On being enquired on this aspect of the matter, it was submitted on behalf of the assessee that there is no perceptible distinction between the position of law qua ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee is allowed. 11.2 Having admitted the additional ground for adjudication as noted above we now turn to the relevant facts touching the issue. As pointed out on behalf of the assessee, a Technology Upgradation Fund Scheme (TUFS) was introduced in 1999 to catalyze investments in textile industries. The purpose of scheme under which the subsidy was given was stated to be to sustain and prove the competitiveness and for long term viability of textile industry. The concerned ministry of textile adopted TUFS scheme envisaging technology upgradation of the industry as per the scheme. The object of the scheme was to enhance sustainable growth in value chain for overall growth of textile industry. Pursuant to TUFS, certain subsidy benefits by way of interest on reimbursement of loans taken from authorized agencies for investment in plant and machinery for spinning units and other machineries in textile industry was availed by textile sector. 11.3 In this background, it was contended on behalf of the assessee that the assessee herein as obtained subsidy by way of reimbursement of interest under the scheme. The assessee has treated the aforesaid interest reimbursement subsidy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ermination of the actual cost of the asset in accordance with the provisions of Explanation 10 to clause (1) of sect ion 43; or (b) . . A claim on behalf of the assessee, as a corollary to said amendment, such a capital receipt may become chargeable to tax which is otherwise a capital receipt w.e.f . 01.04.2016. The aforesaid amendment has thus come into force w.e.f . AY 2016-17 which reinforces the impression of such capital receipt being out of tax net for the assessment year in question. 14. Thus, on first principles, we find ourselves in total agreement with the contentions on behalf of the assessee for non chargeability of such capital receipts regardless of its treatment in books as revenue receipts. We are however conscious in same vain that the issue has been raised for the first time before the Tribunal. The Revenue authorities had no occasion to look into the relevant facts. We accordingly consider it expedient to restore the issue to the file of the AO for verification of relevant factual aspects towards quantum of receipt of interest subsidy and relevant documentation in this regard, if so considered necessary in the opinion of the AO. The AO shall acc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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