Shriniwas Engineering Auto Components Pvt. Ltd. Vs ACIT (ITAT Pune)
ITAT Pune allowed assessee’s appeal & held that ₹37.84 crore incentive received under Package Scheme of Incentives (PSI), 2007 of Government of Maharashtra is capital receipt, not chargeable to tax. Tribunal noted that identical issue stood consistently decided in assessee’s own case for earlier years, including AY 2014-15, where it was held that the object of PSI-2007 is to encourage setting up of industries in backward areas, & computation of subsidy with reference to fixed-asset investment is only a measure of quantification, not reimbursement of asset cost. Relying on SC in P.J. Chemicals & jurisdictional Bombay HC in Welspun Steel, ITAT held that Explanation 10 to s.43(1) has no application as subsidy is not directly relatable to any specific asset; consequently, it is also not income u/s 2(24)(xviii). CIT(A)’s order treating the subsidy as revenue receipt was reversed & addition was deleted in full.
FULL TEXT OF THE ORDER OF ITAT PUNE
The captioned appeal at the instance of assessee is directed against the order dated 26.11.2024 framed by National Faceless Appeal Centre, Delhi emanating out of Assessment Order dated 30.12.2017 passed u/s.143(3) of the Income Tax Act, 1961 (in short ‘the Act’).
