Case Law Details
ACIT Vs Genus Electrotech Limited (ITAT Delhi)
Held that sales tax incentive subsidy and excise duty incentive are in the nature of capital receipts and thus not chargeable to tax as regular income as well as income u/s 115JB for computation of book profit.
Facts-
In the order u/s 154, AO noted that assessee had shown net profit of Rs.10,71,44,263/- but had not shown any tax liability u/s 115JB of the Act and no tax was received under MAT. AO further noted that assessee had adjusted against profit, Debt Redemption Reserve of Rs.4,50,00,000/-. The income was assessed u/s 143(3) of the Act on 29.12.2009 for Rs.5,54,93,353/- after disallowing sales tax subsidy income credited as income in P&L account being capital receipts and treating the same as revenue receipts and central excise rebate refund. That further in the assessment year, claim of adjustment of Rs.4,50,00,000/- on account of Debt Redemption Reserve was disallowed provisionally while computing book profit. AO held that tax should have been levied on the book profit of Rs. 9,28,81,324/- u/s 115JB.
CIT(A) directed AO to grant relief to the appellant. Being aggrieved, revenue has preferred the present appeal.
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