Case Law Details
DCIT Vs Sudal Industries Limited (ITAT Mumbai)
The assessee has received incentive in the form of Octroi refund under Govt. of Maharashtra Package Scheme of Incentives, 2007. We find that the Coordinate Bench of the Tribunal in the case of ACIT Vs. M/s. Universal Construction Machinery and Equipments Ltd. in an identical set of facts has held subsidy received by the assessee under Package Scheme of Incentives, 2007 as capital in nature. Relevant extract of the order of Tribunal reads as under:
“5. We have heard the submissions made by Id. DR and have perused the material available on record. Before the Assessing Officer the assessee has submitted that during the period relevant to the assessment year 2012-13 has received subsidy of Rs. 13,37,61,000/- up to 31-03-2012 and the balance amount of `2,36,05,000 / – is stated to be receivable as on 31-03-2012. The subsidy was sanctioned to the assessee under the Package Scheme of Incentives, 2007 of the State Government, against investment of Rs.26.77 crores made by the assessee in land, factory building, plant and machinery, electrical installation etc. The Commissioner of Income Tax (Appeals) granted relief to the assessee by following the order of Tribunal in the case of M/ s. John Deere Equipments Pvt. Ltd. Vs. Dy. Commissioner of Income Tax (supra). We find that the Co-ordinate Bench of the Tribunal in the aforesaid case has placed reliance on the decision in the case of Commissioner of Income Tax Vs. Reliance Industries Ltd. reported as 339 ITR 632, wherein subsidy sanctioned to the assessee under similar Package Scheme of Incentives, 1993 was held to be capital in nature. The Id. DR has failed to controvert the findings of Commissioner of Income Tax (Appeals). In the absence of any contrary material on record, we uphold the findings of First Appellate Authority in deleting the addition in respect of subsidy received by the assessee holding it to be capital in nature. Accordingly, the appeal of the Revenue is dismissed being devoid of any merit.”
Therefore respectfully following the decision of the coordinate bench, we also hold that the subsidy received by the assessee in the form of octroi duty refund of ₹ 132,07,000/– is a capital receipt not chargeable to tax. Accordingly, we allow ground number 2 of the appeal of the assessee.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
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