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Income Tax Appellate Tribunal, PUNE BENCH “B”, PUNE
Before: SHRI R.S. SYAL & SHRI VIKAS AWASTHY, JM
आदेश / ORDER आदेश आदेश आदेश
PER VIKAS AWASTHY, JM :
This appeal by the Revenue is directed against the order of CIT(A)-1, Nashik dated 29-06-2016 for the assessment year 2011-12.
The Revenue in appeal has assailed the order of CIT(A) by raising following grounds :
“1. Whether on the facts and in the circumstances of the case, the ld. CIT(A)-1, Nashik was justified in treating the incentive received by the assessee from Govt. of Maharashtra in the form of Octroi Refund of Rs.1,68,52,440/- as capital subsidy. 2. Whether on the fact and circumstances of the case, the ld. CIT(A) was right in treating Octroi refund as capital subsidy without appreciating the fact that it was given for as an assistance for carrying on the business of the assessee and not for acquiring a capital asset. 3. Whether on the facts and circumstances of the case, the ld. CIT(A)-1, Nashik erred in ignoring the facts that the assessee company had not filed any revised return of income to make such claim that Octroi refund received from Govt. of Maharashtra is
ITA No.1909/PUN/2016 MSS India Pvt. Ltd.,
capital receipt and had made the said claim only during assessment proceedings?
The appellant prays that the order of the ld. CIT(A)-1, Nashik may please be cancelled and the order of Assessing Officer may please be restored.
The appellant prays to adduce such further evidence to substantiate his case.
The appellant prays leave to add, alter, clarify, amend and or withdraw any grounds of appeal as and when the occasion demands.”
Shri Nikhil Pathak appearing on behalf of the assessee submitted
at the outset that the assessee is engaged in manufacturing of electrical
equipments and electrical components including cable lugs, connectors,
etc. The assessee filed its return of income for the impugned
assessment year on 29-11-2011 declaring total income of
Rs.13,32,82,942/-. During scrutiny assessment proceedings, the
assessee filed a request letter dated 02-02-2015 stating that the
incentive received by the assessee from Maharashtra State Government
in the form of refund of Octroi Rs.1,68,52,440/- be treated as capital
incentive. The ld. Authorized Representative pointed that in the return
of income, the assessee had not claimed Octroi refund incentive as
capital receipt. The Assessing Officer in assessment proceedings
rejected the claim of assessee in the light of decision of Hon’ble
Supreme Court of India in the case of Goetz (India) Ltd. Vs. CIT 284 ITR
323.
The assessee filed appeal against the assessment order dated
27-02-2015. The CIT(A) following the decisions of Hon’ble Bombay High
Court in the case of CIT Vs. Kirloskar Oil Engines Vs. CIT 364 ITR 88
ITA No.1909/PUN/2016 MSS India Pvt. Ltd.,
and CIT Vs. Chaphalkar Brothers 351 ITR 309 held Octroi refund as
capital in nature.
The ld. Authorized Representative further submitted that assessee
received Octroi refund incentive under Maharashtra Government
Package Scheme of Incentives, 2007. The scheme is similar to Package
Scheme of Incentives, 1993. The Coordinate Bench of the Tribunal in
the case of ACIT Vs. M/s. Universal Construction Machinery and
Equipments Ltd. in ITA No.2312/PUN/2016 for A.Y. 2012-13 decided
on 03-08-2018 following the decision rendered in the case of CIT Vs.
Reliance Industries Ltd. 339 ITR 632 held that subsidy received by the
assessee therein is capital in nature. The case of the assessee is
squarely covered by aforesaid decision of the Tribunal.
On the other hand Shri Sudhendu Das representing the
Department vehemently defended the assessment order. The ld. DR
submitted that the assessee claimed subsidy received under Package
Scheme of Incentives, 2007 as capital in nature at the time of
assessment proceedings. The assessee never made this claim either in
the return or income or by filing revised return of income. The
Assessing Officer has no power to entertain fresh claim of the assessee
at the time of scrutiny assessment.
Both sides heard. Orders of the authorities below perused. The
solitary issue raised by the Revenue in appeal is against CIT(A) allowing
incentive received by the assessee from Govt. of Maharashtra in the
form of Octroi refund as capital subsidy. It is an admitted fact that
ITA No.1909/PUN/2016 MSS India Pvt. Ltd.,
the assessee has received incentive in the form of Octroi refund under
Govt. of Maharashtra Package Scheme of Incentives, 2007. We find
that the Coordinate Bench of the Tribunal in the case of ACIT Vs.
M/s.Universal Construction Machinery and Equipments Ltd. (supra) in
an identical set of facts has held subsidy received by the assessee under
Package Scheme of Incentives, 2007 as capital in nature. Relevant
extract of the order of Tribunal reads as under:
“5. We have heard the submissions made by Id. DR and have perused the material available on record. Before the Assessing Officer the assessee has submitted that during the period relevant to the assessment year 2012-13 has received subsidy of Rs.13,37,61,000/- up to 31-03-2012 and the balance amount of Rs.2,36,05,000 / - is stated to be receivable as on 31-03-2012. The subsidy was sanctioned to the assessee under the Package Scheme of Incentives, 2007 of the State Government, against investment of Rs.26.77 crores made by the assessee in land, factory building, plant and machinery, electrical installation etc. The Commissioner of Income Tax (Appeals) granted relief to the assessee by following the order of Tribunal in the case of M/ s. John Deere Equipments Pvt. Ltd. Vs. Dy. Commissioner of Income Tax (supra). We find that the Co-ordinate Bench of the Tribunal in the aforesaid case has placed reliance on the decision in the case of Commissioner of Income Tax Vs. Reliance Industries Ltd. reported as 339 ITR 632, wherein subsidy sanctioned to the assessee under similar Package Scheme of Incentives, 1993 was held to be capital in nature. The Id. DR has failed to controvert the findings of Commissioner of Income Tax (Appeals). In the absence of any contrary material on record, we uphold the findings of First Appellate Authority in deleting the addition in respect of subsidy received by the assessee holding it to be capital in nature. Accordingly, the appeal of the Revenue is dismissed being devoid of any merit.”
The ld. DR has failed to convert the findings given by the Tribunal
in the said case. We do not find any infirmity in the impugned order.
Accordingly, the same is confirmed and the appeal of Revenue is
dismissed.
ITA No.1909/PUN/2016 MSS India Pvt. Ltd.,
In the result, appeal of Revenue is dismissed.
Order pronounced on Wednesday, the 02nd day of January, 2019.
Sd/- Sd/- (R.S.SYAL) (VIKAS AWASTHY) उपा�य�/ VICE PRESIDENT �याियक उपा�य� �याियक सद�य सद�य /JUDICIAL MEMBER उपा�य� उपा�य� �याियक �याियक सद�य सद�य
पुणे Pune; �दनांक Dated : 02nd January, 2019 सतीश
आदेश आदेश क� आदेश आदेश क� क� �ितिलिप क� �ितिलिप �ितिलिप अ�ेिषत �ितिलिप अ�ेिषत अ�ेिषत/Copy of the Order is forwarded to : अ�ेिषत
अपीलाथ� / The Appellant; 1. ��यथ� / The Respondent; 2. आयकर आयु�(अपील) / 3. The CIT (Appeals)-1, Nashik आयकर आयु� / The Pr. CIT-1, Nashik 4. िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण, पुणे “बी बी” / 5. बी बी DR ‘B’, ITAT, Pune; गाड� फाईल / Guard file. 6.
आदेशानुसार आदेशानुसार/ BY ORDER,स आदेशानुसार आदेशानुसार
// True Copy //
Senior Private Secretary आयकर अपीलीय अिधकरण ,पुणे / ITAT, Pune.
ITA No.1909/PUN/2016 MSS India Pvt. Ltd.,
Date 1. Draft dictated on 01-01-2019 Sr.PS 2. Draft placed before author 01-01-2019 Sr.PS 3. Draft proposed & placed before the AM second member 4. Draft discussed/approved by Second AM Member. 5. Approved Draft comes to the Sr.PS/PS Sr.PS 6. Kept for pronouncement on Sr.PS 7. Date of uploading order Sr.PS 8. File sent to the Bench Clerk Sr.PS 9. Date on which file goes to the Head Clerk 10. Date on which file goes to the A.R. 11. Date of dispatch of Order.