Case Law Details
M/s Deepak Spinners Ltd Vs DCIT (ITAT Kolkata)
We note that the issue under consideration whether the subsidy received under TUF scheme is a capital receipt or revenue receipt. The ld. CIT(A) treated it as part of fixed assets and held that said subsidy should be reduced from the cost of fixed assets.
Held by ITAT- We note that where a portion of the cost of an asset acquired by the assessee has been met directly or indirectly by the Central Government or State Government in the form of subsidy then so much of the cost as is relatable to such subsidy shall not be included in the actual cost of the asset. When such subsidy cannot be directly relatable to the asset acquired, then such subsidy shall not be included in the actual cost of the asset. That is, to reduce from the cost of asset, the subsidy should be directly or indirectly used for acquiring an asset. In the assessee’s case under consideration no asset was being acquired by using TUF subsidy therefore it should not be reduced from fixed assets. However, such TUF subsidy is to be treated capital receipt.
FULL TEXT OF THE ITAT JUDGEMENT
The captioned appeal filed by the assessee , pertaining to Assessment Year 2012-13, is directed against an order passed by the Commissioner of Income Tax(Appeals)-4, Kolkata which in turn arises out of an assessment order passed by the Assessing Officer u/s. 143(3) of the Income Tax Act, 1961 (hereinafter referred to as the ‘Act’), dated 30.03.2015.
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machinery subsidy taxable or non taxable