Inox Air Products Private Limited Vs ACIT (ITAT Pune)
The issue in the present appeal relates to the subsidy received by the assessee company is whether in the nature of capital or revenue. There is no need to extract the schemes of the subsidy policies of the respective States as the Assessing Officer had set out clearly the schemes of the subsidies of the three States. On perusal of the respective schemes of the subsidy, it is clear that the subsidy is only granted in order to accelerate the industrial development and promote the employment opportunities. It is settled position of law that to determine the true nature of the subsidy, a “purpose test” has to be applied as held by the Hon’ble Supreme Court in the case of CIT Vs. Ponni Sugars and Chemicals Ltd reported in 306 ITR 392 (SC). The Co-ordinate Bench of the Tribunal has rightly applied the “purpose test” and had come to conclusion that the nature of subsidy is only in capital nature and we do not see any reason to differ with the reasoning of the Co-ordinate Bench of the Tribunal in assessee’s own case in ITA No.1042/PUN/2017 and accordingly, we do not find merit in the grounds of appeal filed by the Revenue.
