TMI Blog2022 (10) TMI 1032X X X X Extracts X X X X X X X X Extracts X X X X ..... t the AO not to add sales tax subsidy received by the assessee, which is in the nature of capital receipt while computing the book profit u/s 115JB. - ITA No. 1834/M/2021 , ITA No. 1736/M/2021 - - - Dated:- 29-9-2022 - SHRI KULDIP SINGH , JUDICIAL MEMBER AND SHRI GAGAN GOYAL , ACCOUNTANT MEMBER Assessee by : Shri Ronak Doshi , A. R. Ms. Ayushi Modani , A. R. Revenue by : Shri Rakesh Garg , D. R. ORDER Per : Kuldip Singh , Judicial Member : Aforesaid cross appeals having been emanated from same impugned order passed by the Ld. Principal Commissioner of Income Tax (Appeals), are taken up for disposal by way of composite order to avoid any repetition of discussion. 2. Appellant DCIT, Circle-1(4), Mumbai (herein ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... late proceedings, undertaken pursuant to the decision of the Hon'ble ITAT setting aside the original assessment following the judgment of the Hon'ble Special Bench of the ITAT in the case of Reliance Industries Ltd., 88 ITD 273 (SB), should be quashed, since before the date when the said order(s) of the ITAT was passed, the judgment of the Hon'ble Bombay High Court affirming the decision of the Hon'ble Special Bench had been set aside by the Hon'ble Supreme Court and the matter was restored to the Hon'ble Bombay High Court for fresh adjudication of the question of law framed by the Hon'ble Supreme Court. 5. On the fact and in the circumstances of the case and in law, in view of the judgment of the Hon'bl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of the case _and_ in law, since the figure of notional sales tax liability/notional sales tax subsidy is taken from the sales tax assessment order which is passed long after the due date of filing of the income-tax return and the figure is also subject to changes in sale-tax appellate stages, it would be unworkable for the Income-tax Department to adopt those figures because, it would not be possible to file any income-tax return in time in such cases and it would not be possible to chase the variations made in the figures in the Sales-tax appellate stages. 9. On the facts and in the circumstances of the case and in law, as held by the Hon'ble Supreme Court in the case of CIT, Bangalore v. B.C. Srinivas Shetty, 11981] 128 ITR 294 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3) of the Income Tax Act, 1961 (for short 'the Act') vide order dated 14.02.2003. 4. During the year under consideration assessee company availed of sales tax incentive of Rs. 59,16,17,190/- for setting up new industrial units under the scheme of various state governments. In the first round of litigation co-ordinate Bench of the Tribunal vide order dated 22.10.2014 by admitting the additional ground raised by the assessee company to treat sales tax incentives as capital receipt so as to exclude from the profit of business offered to tax remitted the case back to the Assessing Officer (AO) to decide afresh after considering the decision of the Special Bench of the Tribunal rendered in case of Reliance Industries 88 ITD 273. 5. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t in the hands of the assessee. 9. In the backdrop of the aforesaid facts and circumstances of the case the sole question arises for determination in this case is: As to whether Ld. PCIT(A) has erred in allowing the sales tax subsidy received by the assessee company as capital receipt by relying upon the decision rendered by co-ordinate Bench of the Tribunal in case of Reliance Industries Ltd. (supra).? 10. Bare perusal of the impugned order passed by Ld. PCIT(A) goes to prove that Ld. PCIT(A) has decided this issue in favour of the assessee by treating the sales tax subsidy received by the assessee company during the year under consideration as capital receipt by relying upon order passed by Special Bench of the Tribunal in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l Bench of the Tribunal in case of Reliance Industry Ltd. (supra) has already been set aside by the Hon'ble Supreme Court by remitting the matter back to the Hon'ble Bombay High Court, order passed by the Ld. PCIT(A) is not sustainable. But this argument of the Revenue is misplaced because the issues has been thrashed at length in view of the law laid down in case of Welspun Steel Ltd. (supra) and in case of Ponni Sugars and Chemicals Ltd. (supra) by the Hon'ble High Court and Hon'ble Supreme Court of India respectively and as such finding no illegality or perversity in the impugned findings returned by Ld. PCIT(A) in treating the sales tax subsidy/incentive as capital receipt are hereby upheld. 14. The assessee company b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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