Case Law Details
ACIT Vs M/s Agro Life Science Corporation (ITAT Kolkata)
In the present case the amount of excise duty refund and interest subsidy was treated by the AO as revenue receipt subject to tax. The reason given by AO is that the impugned amount was given to assessee after the commencement of commercial Production. However, the Ld. CIT(A) reversed the order of AO on the ground that on identical facts and circumstances the Hon’ble Jammu & Kashmir High Court in the case of Shree Balaji Alloys (supra) has treated the impugned receipt as capital in nature and accordingly not chargeable to tax.
Held by ITAT
The incentives provided to the Industrial units, in terms of the New Industrial Policy, for accelerated Industrial development in the State, for creation of such industrial atmosphere and environment, which would provide additional Permanent source of Employment to the unemployed in the State of Jammu and Kashmir, were in fact, in the nature of creation of New Assets of Industrial Atmosphere and Environment, having the potential of employment generation to achieve a social object. Such incentives, designed to achieve Public Purpose, cannot, by any stretch of reasoning, be construed as production or operational incentives for the benefit of assessees alone.
Thus, looking to the purpose of eradication of the social problem of unemployment in the State by acceleration of the industrial development and removing backwardness of the area that lagged behind in Industrial development, which is certainly a purpose in the Public Interest, the incentives provided by the Office Memorandum and statutory notifications issued in this behalf, to the appellants-assessees, cannot be construed as mere Production and Trade Incentives, as held by the Tribunal.
Please become a Premium member. If you are already a Premium member, login here to access the full content.
