Advocate Akhilesh Kumar Sah
Quantification of subsidy based on reimbursement of sales tax does not mean that it is a revenue receipt
Recently, in PepsiCo India Holdings Pvt. Ltd, (erstwhile Pepsi Foods Pvt. Ltd.) vs. Addl. CIT [I.T.As. No. 1334/CHANDI/2010, 1203/ CHANDI /2011, 2511/DEL/2013, 1044/DEL/2014 & 4516/DEL/2016 Assessment Years: 2006-07 to 2010-11 and I.T.As. No. 4517/DEL/2016, 4518 DEL/2016, 6537/DEL/2016, 6582/DEL/2017 Assessment Years: 2011-12 to 2013-14, decided on 19.11.2018], these appeals had been filed by the Assessee Company and Pepsi Foods Pvt. Ltd. (PFL), now merged with the PepsiCo India Holdings Pvt. Ltd. (PIH), (hereinafter collectively referred to as the assessee) against separate impugned orders for the AYs 2006-07 to 2013-14. Since the issues involved in all the appeals were by and large common arising out of identical set of facts, therefore, they were heard together and were disposed of by way of the consolidated order.
Pepsi Foods Pvt. Ltd. (PFL) was incorporated in India on 24.02.1989 as a Private Limited Company jointly promoted by PepsiCo Inc. USA, Punjab Agro Industries Corporation and Voltas Limited. Thereafter, in 1993, PepsiCo Inc. bought over the shareholding of Voltas in PFL. In that manner, PepsiCo Inc. held 99.98% of PFL. With effect from April 01, 2010, PFL was merged with PepsiCo India Holdings Pvt. Ltd., the assessee company, which in turn was also set up in India as subsidiary of PepsiCo Inc.
Amongst other issues, in I.T.A. No. 6537/DEL/2016 pertaining to AY 2012-13 and in I.T.A. No. 6582/DEL/2017 pertaining to AY 2013-14, the assessee had challenged the addition made by the Assessing Officer(AO) on account of IPA subsidy received by the assessee under the West Bengal Incentive Scheme, 2004, details of which were as under: –
