DCIT CIRCLE 12(1), NEW DELHI vs. M/S. INDO RAMA SYNTHETICS (INDIA) LTD., GURGAON

ITA 1915/DEL/2018Status: DisposedITAT Delhi05 April 2021AY 2014-155 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal upheld the CIT(A)'s decision to delete the disallowance. It followed its own previous orders and a Special Bench decision which held that sales tax subsidy is a capital receipt not chargeable to tax.

What were the facts?

The Revenue appealed against the deletion of disallowance on sales-tax subsidy. The assessee argued that the issue was settled in their favour by previous Tribunal orders. The Assessing Officer had also followed a prior year's assessment.

What were the issues?

Whether sales tax subsidy is a capital receipt and therefore not chargeable to tax.

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(1)Show list

Detected automatically from the text. Citations are also linked where they appear in the judgment. The count shows how many other judgments on BharatTax rely on the same authority.

DCIT v. Reliance Industries Ltd.
88 ITD 273 · 2004 · ITAT
169 citing

Income Tax Appellate Tribunal, DELHI ‘C’ BENCH,

Before: SHRI N.K. BILLAIYA, & SHRI SUDHANSHU SRIVASTAVA

For Respondent: Ms. Sunita Singh, CIT-DR

Hearing: 05.04.2021Pronounced: 05.04.2021

PER N.K. BILLAIYA, ACCOUNTANT MEMBER,

This appeal by the Revenue is preferred against the order of the ld. CIT(A) – 22, New Delhi dated 05.12.2017 pertaining to Assessment Year 2014-15.

The solitary grievance of the Revenue is that the ld. CIT(A) erred in deleting the disallowance made on the sales- tax subsidy of Rs. 56.57 crores on the ground that the sales tax subsidy is capital receipt not chargeable to tax.

At the very outset, the ld. counsel for the assessee submitted that this issue is well settled in favour of the assessee and against the Revenue by the Tribunal since A.Y 1997-98, 2003-04 and 2004-05 and also in A.Y 2005-06, 2006- 07, 2008-09 and 2009-10 and also in A.Y 2013-14. The ld. counsel for the assessee supplied copies of the orders of the Tribunal.

The ld. DR fairly conceded to this.

We have given thoughtful consideration to the orders of the authorities below. We find that the Assessing Officer himself has followed the assessment for A.Y 2013-14. The quarrel in A.Y 2013-14 travelled upto the Tribunal and this Tribunal in order dated 26.11.2020 has decided this issue as under:

“7. We have carefully considered the orders of the authority below. We find force in the claim that the impugned issue is covered in favour of the assessee and against the revenue by the earlier order of the Tribunal in 967/Del/2010 and 5323/Del/2011 wherein the Tribunal held as under :-

"We have heard the rival contentions in light of the material produced and precedents relied upon. We find that Ld. CIT(A) has given a finding that issue in dispute was covered by the Special Bench decision of the Tribunal in the case of Reliance Industries Ltd. (Supra). Though the scheme applicable in the case of Reliance Industries Ltd. was 1979 scheme, however, in the 1993 scheme terms and conditions were of the same nature and intent. For this purpose, a comparative chart was referred by the Ld. CIT(A). As per the comparative chart the terms and conditions applicable in 1979 scheme were of the same nature and intent of the 1993 scheme. We further note that Mumbai Tribunal in the case of Everest Industries Ltd. in IT A No. 814/Mum/2007 has held that salient features of the 1993 scheme are identical to that of 1979 scheme. We further note that the Tribunal in ITA No. 678 & 679/Del/2012 in the case of M/s Indo Rama Textiles Ltd. on identical facts has held that the decision of the Mumbai Tribunal, Special Bench in the case of Reliance

Industries 88 ITD 273 is applicable. Accordingly, in the background of the aforesaid discussion and precedents, we hold that the Ld. CIT(A) has passed a reasonable order which does not need any- interference on our part. Accordingly, we uphold the same."

Respectfully following the same we decline to interfere. Appeal by the revenue is accordingly dismissed.

Respectfully following the same, we order accordingly.

In the result, the appeal of the Revenue in is dismissed.

The order is pronounced in the open court on 05.04.2021.

Recent GST High Court judgments

Search GST case law →