What did the Tribunal hold?

The Tribunal held that if the excise duty was an exemption, it would not be taxable as income. However, if it was a refund, it would be taxable. The Assessing Officer was directed to verify the nature of the receipt.

The assessee claimed excise duty subsidies as capital receipts, which were disallowed by the lower authorities. The assessee contended that these were exemptions and not covered under Section 2(24)(xviii) of the Income-tax Act.

What were the issues?

Whether excise duty subsidies received by the assessee constitute income taxable under Section 2(24)(xviii) of the Income-tax Act, or are they capital receipts not subject to tax.

B R Agrotech Ltd., Central Delhi vs DCIT | ITAT Delhi 2026

Income Tax Appellate Tribunal, DELHI BENCH ‘E’, NEW DELHI

Before: SHRI SATBEER SINGH GODARA & SHRI NAVEEN CHANDRA

For Appellant: CA Sh. Harsh Raghav, Adv

For Respondent: Ms. Amisha S Gupt, CIT DR

Hearing: 21.05.2026Pronounced: 19.08.2026

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘E’, NEW DELHI

BEFORE SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER AND SHRI NAVEEN CHANDRA, ACCOUNTANT MEMBER ITA No. 3750 & 3751/DEL/2023 Assessment Year: 2017-18 & 2016-17

B R Agrotech Ltd. Vs Deputy Commissioner of 1505, Vikram Tower, Patel Nagar, Income Tax- Circle 4(2), Delhi- 110 008 C.R. Building, I.P Estate, Delhi- 110 002 (APPELLANT) (RESPONDENT) PAN No. AABCB3432F

Assessee by: Sh. S. S. Nager, CA Sh. Harsh Raghav, Adv. Revenue by : Ms. Amisha S Gupt, CIT DR

Date of Hearing: 21.05.2026 Date of Pronouncement: 19.08.2026 ORDER PER SATBEER SINGH GODARA, JM: These assessee’s twin appeals ITA Nos. 3750 & 3751/Del/2023 for assessment years 2017-18 & 2016-17, arise against the Commissioner of Income Tax (Appeals) [in short, the “CIT(A)”], New Delhi’s orders both dated 27.10.2023, passed in order nos. 10085/2020-21 & 10080/2020-21, involving proceedings under section 143(3) & 143(1) of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’); respectively. Heard both the parties. Case files perused.

It emerges at the outset during the course of hearing that the assessee/appellant herein raises its identical sole substantive ground in

both these appeals seeking to reverse the learned lower authorities’ action; and more particularly, the learned CIT(A)’s lower appellate discussion declining its claim on the excise duty subsidies of Rs. 1,67,86,726/- and Rs. 22,04,09,518/- assessment year wise; respectively. Both the parties invite our attention to the CIT(A)’s lower appellate discussion in the “lead” assessment year 2016-17; reading as under:

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This is what leaves the assessee aggrieved. 3. We have given our thoughtful consideration to the assessee and the Revenue’s respective vehement submissions against and in support of the impugned additions. Learned counsel more particularly, invites our attention to the assessee’s paperbook pages 50 to 55 compiling the Ministry of Commerce and Industries’ office memorandum dated 14.06.2002 read with clause 3.1 therein making it clear that the concerned new units to be 5 | P a g e

set up in the state of Jammu & Kashmir are entitled to 100% excise duty exemption for a period of 10 years from the date of commencement of commercial production. Learned counsel case accordingly is that contrary to the CIT(A)’s lower appellate findings herein, the assessee has not received “any assistance” so as to be covered u/s 2(24)(xviii) of the Act inserted in the Act vide Finance Act, 2015 w.e.f. 01.04.2017(supra). He further quotes law Principal Commissioner of Income Tax v. M/s Gravita Metal Inc. [(2024) 168 taxmann.com 379 (Jammu & Kashmir & Ladakh) deciding the very issue against the department; as follows:

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Learned CIT(DR) Ms. Amisha S. Gupt, on the other hand, takes us to assessee’s written synopsis filed in the lower appellate proceedings at page 5 averring therein that it had in fact received excise duty refund than having enjoyed exemption thereof (supra). Her case accordingly is that the learned CIT(A) has rightly refused the impugned relief to the assessee by quoting the aforesaid amended statutory provision.

We have given our thoughtful consideration to the assessee and the Revenue’s foregoing respective submissions. We make it clear that hon’ble high court hereinabove clearly appears to have settled the issue in the assessee’s favour and against the department whilst holding such an excise duty exemptions as not covered under the newly introduced statutory amendments. We thus accept the assessee’s case in principle and direct the learned Assessing Officer to verify this clinching factual position afresh 7 | P a g e

as to whether it is an instance of the impugned excise duty exemption or refund(s) actually received. And that if he finds the assessee having got the refund thereof, it shall not be entitled for the impugned capital receipt relief. We order accordingly.

Same order to follow in the assessee’s latter appeal ITA No. 3750/Del/2023 in Assessment Year 2017-18 since involving identical see of facts and issue(s).

These assessee’s twin appeals ITA Nos. 3750 & 3751/Del/2023 are allowed for statistical purposes in above terms. A copy of this common order be placed in the respective case files.

Order pronounced in the open court on 19.08.2026.

Sd/- Sd/- (NAVEEN CHANDRA) (SATBEER SINGH GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 19.08.2026 *Pooja Mittal, Sr. PS* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR

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B R AGROTECH LTD.,CENTRAL DELHI vs. DEPUTY COMMISSIONER OF INCOME TAX- CIRCLE 4(2), NEW DELHI

What did the Tribunal hold?

What were the facts?

What were the issues?

Which sections of the Income-tax Act were involved?

Recent GST High Court judgments