COMMISSIONER OF INCOME TAX vs. M/S. BIMLA ISPAT and ALLOYS P LTD.

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ITA/16/2016HC GauhatiGAHC01004301201605 June 20161 pages
AI SummaryDismissed

What did the High Court hold?

The Tribunal's decision to allow the deduction under Section 80IC for subsidies was upheld. The Revenue conceded that the Supreme Court of India, in a recent order dated March 9, 2016 (including Civil Appeal No. 7622 of 2014), had held that deductions in respect of subsidies are permissible under the law. Given this settled legal position, the High Court found no justification to admit the Revenue's appeal. The ratio decidendi is that subsidies are eligible for deduction under Section 80IC, as affirmed by the Supreme Court. The operative direction was to dismiss the appeal.

What were the facts?

The Revenue has filed this appeal under Section 260A of the Income Tax Act, 1961, challenging an order dated November 19, 2013, passed by the Income Tax Appellate Tribunal (ITAT), Guwahati Bench. The ITAT had allowed the respondent's appeal for Assessment Year 2008-09. The respondent had claimed a deduction of Rs. 19,69,381/- under Section 80IC for transport, interest, and power subsidies. The Assessing Officer disallowed this deduction in an order dated December 27, 2010. The Commissioner of Income Tax (Appeals) upheld the Assessing Officer's decision by dismissing the respondent's appeal on March 4, 2013. The ITAT's subsequent decision in favor of the respondent is the subject of the present appeal.

What were the issues?

1. Whether the Tribunal was justified in allowing the deduction claimed by the respondent under Section 80IC of the Income Tax Act, 1961, in respect of subsidies received. The Revenue contended that the deduction was not permissible. The respondent argued that the subsidies were eligible for deduction under Section 80IC. The Revenue did not present any specific arguments beyond this, relying on the prior disallowance by the Assessing Officer and CIT(A). The judgment does not record specific arguments or precedents cited by either party, other than the Revenue's acknowledgment of a Supreme Court decision.

Which sections of the Income-tax Act were involved?

Section 260A,Section 80IC

AI-generated summary — verify with the full judgment below

ITA 16/2016 BEFORE HON’BLE THE CHIEF JUSTICE MR. AJIT SINGH HON’BLE MR. JUSTICE SUMAN SHYAM (Ajit Singh, C.J.) Mr. S Sharma, learned counsel for the appellant. Heard on admission. This appeal under Section 260(A) of the Income Tax Act, 1961 is directed against order dated 19.11.2013 passed by the Income Tax Appellate Tribunal, Guwahati Be nch, whereby it has allowed respondent’s ITA No.425/Gau/2013 for the Assessment Year 2008-09. 2. The respondent had filed its return of Income for the assessment year 20 08-09. The Respondent claimed and received deduction of Rs. 19,69,381/- under Se ction 80IC of the Income Tax Act, 1961 on the profits and gains of business in r espect of Transport Subsidy, Interest Subsidy and Power Subsidy. But the same wa s disallowed by the Assessing Officer vide order dated 27.12.2010. Aggrieved, th e respondent preferred appeal before the Commissioner of Income Tax (Appeals), S hillong, who, vide order dated 4.3.2013 has dismissed the same. Thereafter, the respondent filed appeal before the Income Tax Appellate Tribunal, Guwahati Bench , which has been allowed by the impugned order dated 19.11.2013. It is against t his order, the Revenue has filed the present appeal.

3.

It is not disputed by the learned counsel for the appellant that recentl y the Supreme Court of India vide order dated 9.3.2016 in a bunch of appeals inc luding Civil Appeal No.7622 of 2014 has held that deduction in respect of subsid y is permissible under law.

4.

We, therefore, having regard to the settled legal position in the matter , find no justification to admit the appeal.

The appeal is accordingly dismissed.

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