DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE -14, , PUNE vs. JOHN DEERE INDIA PVT.LTD,, PUNE

PER Dr. DIPAK P. RIPOTE, A.M : This is an appeal filed by the Revenue against the order of the Learned Commissioner of Income Tax (Appeals)-13, Pune [Ld.CIT(A)] for Assessment Year 2012-13 on 10.02.2017.

ITA No.1733/PUN/2017

revenue in nature being incentive given by the State Govt. for increasing the profitability of the assessee.

(iv) Whether on the facts and in the circumstances of the case Ld. CIT(A) has grossly erred in not appreciating the fact that the incentive given in the form of exemption from Sales Tax was only eligible to the assessee after setting up of the unit in backward area and after commencement of production in order to increase the profitability of assessee company to run the business more profitable hence the receipts in the hands of the assessee was revenue in nature.

(v) Whether on the facts and in the circumstances of the case, Ld. CIT(A) has grossly erred in holding that the Sales Tax incentive receipts to the appellant in the 1993 package scheme of incentives announced by the Govt. of Maharashtra as Capital Receipt, where there was neither the incentive was given to acquire a capital asset nor to set up or complete any project or payment of loan taken for setting up for the industry/unit.

(vi) Whether on the facts and in the circumstances of the case, Ld. CIT(A) has grossly erred in not applying the dictum of Hon'ble Apex Court in the case of Sahney Steel & Press Works Ltd. vs CIT 228 ITR 220(SC) which was squarely applicable in the assessee case.

(vii) Whether the CIT(A) was right in law and on facts in excluding functionally comparable companies.

(viii) Whether the CIT(A) was right in law and on facts in including companies which are not functionally comparable.

(ix) Whether the CIT(A) was right in law and on facts in excluding functionally comparable companies on the ground of non availability of segmental data, when the entire range of activity of the comparable was in the field of software services.

(x) Whether the CIT(A) was right in law and on facts in excluding companies which are considered as functionally comparable by the assessee himself.

(xi) Whether the Ld. CIT(A) erred by directing to exclude Asian Business Exhibition & Conferences Limited as being functionally different.

ITA No.1733/PUN/2017 (xii) Whether Ld. CIT(A) was correct in excluding the comparable without analyzing FAR of the company only on the ground of higher turnover and having higher assets. (xiii) Whether the Ld. CIT(A) has erred in directing the AO to allocate unallocable expenses to each segment in proportion to segmental turnover to total turnover as such allocation is unscientific and not based on actual figures.” Submission of Ld. AR:

3.1 The AO in the assessment Order treated Sales tax Incentives as Revenue Receipts, where as Ld.CIT(A) has allowed the assessee’s appeal on this issue following earlier ITAT order’s in assessee’s own case. Ld.AR read out the relevant paragraphs 2.1.4 of the Ld. CIT(A)’s order. Ld. AR submitted that the issue is decided by ITAT Pune in assessee’s own case in favour of assessee. Ld. AR also relied on ITAT Pune’s decision in the case of Advik Hi Tech Pvt Ltd 1156 & 1157 /PUN/2023.

3.2 Ld.AR submitted that the Assessee’s AE had filed MAP application. Competent Authorities of India and USA have resolved the issue regarding Transfer pricing adjustments for AY 2012-13, 2013-14, 2014-15 & 2015-16. Ld. AR invited our attention to page 277-279 of the paper book. Ld. AR submitted that Total Adjustments made u/s 92CA for the year was Rs.19,73,03,325/-. Ld. CIT(A) sustained the Addition of Rs.9,73,17,082/- out of the Total adjustments made by TPO. After giving effect to the MAP the balance adjustments will be Rs.3,39,60,337/-. Ld. AR further submitted that initially

ITA No.1733/PUN/2017 Assessee had filed appeal against the adjustments of Rs.3,39,60,337/- as ITA No.1165/PUN/2017, but subsequently the assessee had withdrawn the said appeal in ITA No. 1165/PUN/2017. Ld. AR submitted that hence the revenue’s grounds regarding TP adjustments needs to be dismissed.

Submission of Ld. DR:

Findings and Analysis:

5.1 The Assessee company is engaged in manufacturing of Tractors , agricultural equipment’s and its spares. During the year the assessee has received Sales tax subsidy of Rs.36,47,53,030/-. The assessee claimed the said amount as exempt as capital Receipt. Assessing Officer (AO) treated the said amounts as revenue receipts and added to the Total Income. The relevant paragraphs of the Assessment Order are as under :

ITA No.1733/PUN/2017

5.2 Ld. CIT(A) allowed the appeal of the assessee on the issue of Sales tax subsidy following the earlier years ITAT orders in assessee’s own case. It can be observed that the Assessing Officer himself in the Assessment Order has admitted that the issue has been decided by ITAT in assessee’s own case for earlier years in assessee’s favour. This fact has not been disputed by Revenue. We have perused the ITAT orders in ITA Nos. 2663 & 2775/PUN/2016 and noted that the ITAT in assessee’s own case had held the assessee has rightly claimed the impugned amounts as exempt. Accordingly, following the principle of consistency we uphold the order of Ld.CIT(A) on the

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issue of sales tax subsidy. Accordingly, the ground numbers (i) to (vi) raised by the revenue are dismissed.

6.1 We have perused the working filed by the Assessee and noted that after giving effect to the MAP order and Order of Ld.CIT(A) the balance TP adjustments were Rs.3,39,60,337/-. The Assessee had filed an appeal against the said adjustments as ITA 1165/PUN/2017. The Assessee has withdrawn the appeal ITA 1165/PUN/2017. Copy of the ITAT order in ITA 1165/PUN/2017 dated 24/11/2025 has been filed by the assessee, allowing the assessee to withdraw the appeal. In these facts and circumstances of the case the revenue’s grounds (vii) to (xiii) are dismissed as not maintainable.

Order pronounced in the open Court on 31st August, 2026

Sd/- Sd/- (VINAY BHAMORE) (Dr. DIPAK P. RIPOTE) JUDICIAL MEMBER ACCOUNTANT MEMBER पुणे/Pune; दिन ांक/Dated : 31-08-2026 Ravi Kumar Digitally signed by Ravi Kumar Date: 2026.08.31 15:09:31 Ravi Kumar +05'30' आदेशकीप्रतितितिअग्रेतिि/Copy of the Order is forwarded to: 1. अपील र्थी/ The Appellant 2. प्रत्यर्थी/ The Respondent 3. The concerned Pr.CIT, Pune 4. DR, ITAT, ‘C’ Bench, Pune 5. ग र्डफ ईल / Guard file. आदेशानुसार/ BY ORDER, // True Copy // Assistant Registrar आयकरअपीलीयअदिकरण, पुणे / ITAT, Pune