Jindal Poly Films Ltd. Vs ACIT (ITAT Delhi)
This appeal returned to the Tribunal pursuant to directions of the Hon’ble Delhi High Court dated 09.05.2025, which held that the Tribunal had earlier wrongly presumed the year to be “unabated”. The High Court clarified that since a notice u/s 153A was issued when assessment proceedings were already pending pursuant to a revision u/s 263, the assessment had abated. Therefore, AO had full power to frame a fresh assessment even without incriminating material.
On remand, Tribunal examined the two main issues on merits:
Sales Tax Subsidy of ₹22.63 Cr – Capital vs Revenue Receipt
Assessee raised an additional ground before CIT(A) claiming that sales tax incentive received under the Maharashtra Package Scheme of Incentives, 1993 was a capital receipt. CIT(A) rejected the claim on technical grounds (not claimed in return, not in accounts/tax audit, earlier treated as revenue).
Tribunal noted that in Assessee’s own case for AYs 2008-09 & 2009-10, Tribunal (order dated 04.06.2024) had already allowed the same claim, holding the subsidy to be capital in nature, relying on Delhi High Court in Indo Rama Synthetics 337 CTR 159, which applied the purpose test from Sahney Steel & held that incentives under the 1993 Scheme were to promote setting up/expansion of units in backward areas, hence capital. Following its own earlier order & binding Delhi HC judgment, Tribunal directed the AO to treat the sales tax subsidy as capital receipt, exempt from tax, & remanded only for quantification of the amount actually credited in books.
