Shriniwas Engineering Auto Components Pvt. Ltd. Vs ACIT (ITAT Pune)
ITAT Pune held that subsidy received from Maharashtra Government under the Package Scheme of Incentives, 2007 is to be treated as income liable to be taxed for the year under consideration. Accordingly, order of CIT(A) upheld and appeal dismissed.
Facts- So far as the issue raised in the instant appeal is concerned, we note that AO had examined the issue of subsidy received by the assessee from the Govt. of Maharashtra for Mega Projects under the Package Scheme of Incentive, 2007 for Fixed Capital Investment by new units in under developed areas of the state. Assessee has claimed it as Capital receipt not liable to tax. AO after examining the issue in detail has observed that in the instant case subsidy received by the assessee is towards Exemption of Stamp Duty, Exemption of Electricity Duty for a period of 7 years and Industrial Promotion Subsidy and the same has been granted to encourage the business by giving various exemptions which inturn will yield more profits to the assessee and subsidy is not related to any fixed asset therefore the subsidy granted is taxable u/s.2(24)(xviii) of the Act.
Further, AO has made other disallowances including disallowance made u/s.36(1)(va) of the Act for delay in deposit of Employees contribution to Provident Fund/Employees State Insurance (PF/ESI) of Rs.61,55,461/-.
