SHRINIWAS ENGINEERING AUTO COMPONENTS PVT. LTD,PUNE vs. ITO WARD 6(1), PUNE

ITA 155/PUN/2025Status: DisposedITAT Pune22 December 2025AY 2017-19834 pages
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What did the Tribunal hold?

The Tribunal decided the issues as follows: Regarding the disallowances for late payment of ESIC and PF, the judgment does not explicitly state the Tribunal's finding or reasoning, but the assessee's appeals for A.Ys. 2016-17 to 2018-19 were partly allowed, implying some relief or reconsideration on this aspect, though the specific outcome is not detailed. On the issue of the capital subsidy, the Tribunal held that the subsidy received from the Government of Maharashtra under the PSI, 2007, is neither directly nor indirectly relatable to acquiring any fixed assets. Therefore, Explanation 10 to section 43(1) is not applicable. The Tribunal further held that the subsidy is to be treated as income under section 2(24)(xviii) on an annual basis as and when received. The Tribunal also found that the adjustment made by CPC under section 143(1)(a)(ii) was justified due to apparent mistakes and mismatch of information in the assessee's Income Tax Return (ITR), where the assessee claimed the subsidy as exempt income but failed to provide necessary details in Schedule EI. The CIT(Appeals)'s finding on this point was reversed. Consequently, the grounds of appeal raised by the Revenue for A.Ys. 2018-19 to 2020-21 were allowed.

What were the facts?

The appeals before the Income Tax Appellate Tribunal (ITAT) Pune Bench concern Shriniwas Engineering Auto Components Pvt. Ltd. (the assessee) and the Revenue for assessment years 2016-17 to 2020-21. The assessee's appeals (ITA Nos. 154-156/PUN/2025) challenge the CIT(Appeals)'s dismissal of grounds related to disallowances for late payment of ESIC and PF, and the addition of capital subsidy received from the Maharashtra Government under the Package Scheme of Incentives (PSI) 2007, treating it as revenue. The Revenue's appeals (ITA Nos. 1843, 1844/PUN/2024 and 114/PUN/2025) challenge adjustments made by CPC under section 143(1)(a) regarding the subsidy. The Assessing Officer (AO) treated the subsidy as taxable under section 2(24)(xviii) of the Income Tax Act, 1961, while the assessee claimed it as a capital receipt and sought to reduce it from the actual cost of assets under Explanation 10 to section 43(1).

What were the issues?

1. Whether the disallowances made by the AO on account of late payment of ESIC and PF beyond the prescribed period are sustainable, and if the CIT(Appeals) erred in dismissing the assessee's grounds on this issue. - Assessee's contention: The disallowances are not justified. - Revenue's contention: Not recorded. 2. Whether the capital subsidy of Rs. 43,20,39,280/- received from the Maharashtra Government under the Package Scheme of Incentives (2007) is taxable as revenue receipt in the hands of the assessee, or if it should be treated as a capital receipt and reduced from the actual cost of assets as per Explanation 10 to section 43(1) of the Income Tax Act, 1961. - Assessee's contention: The subsidy is a capital receipt and should be reduced from the actual cost of assets under Explanation 10 to section 43(1), making it not taxable as income under section 2(24)(xviii). - Revenue's contention: The subsidy is taxable as income under section 2(24)(xviii) as it is not related to acquiring fixed assets and is intended to encourage business and profit generation. The adjustment made by CPC under section 143(1)(a) for incorrect claim is also justified.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 144B,Section 143(1),Section 36(1)(va),Section 43(1),Section 143(1)(a),Section 143(1)(a)(ii)

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सत्यमेव जयते IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCHES “B”, PUNE BEFORE DR.MANISH BORAD, ACCOUNTANT MEMBER AND SHRI VINAY BHAMORE, JUDICIAL MEMBER आयकर अपील सं. / ITA Nos.154 to 156/PUN/2025

Assessment Years : 2016-17 to 2018-19 Shriniwas Engineering Auto Components Pvt. Ltd., Office No.5, Mansara Apartments, Near LIC Building, Shivajinagar, Pune 411016 Maharashtra PAN: AAJCS8944F Vs. ACIT, Circle-6, Pune/ ITO, Ward-6(1), Pune/ NFAC, Delhi Appellant Respondent आयकर अपील सं. / ITA Nos.1843, 1844/PUN/2024 and Assessment Years : 2018-19, 2019-20 and 2020-21 ACIT, Circle-5, Vs. Pune Shriniwas Engineering Auto Components Pvt. Ltd., Office No.5, Mansara Apartments, Near LIC Building, Shivajinagar, Pune 411016 Maharashtra PAN : AAJCS8944F Appellant Respondent आयकर अपील सं. / ITA Nos.1423 and 157/PUN/2025

Assessment Years : 2019-20 and 2020-21 Shriniwas Engineering Auto Components Pvt. Ltd., Office No.5, Mansara Apartments, Near LIC Building, Shivajinagar, Pune 411016 Maharashtra PAN : AAJCS8944F Vs. ACIT, Circle-6, Pune/ ITO, Ward-6(1), Pune/ NFAC, Delhi Appellant Respondent 2 Shriniwas Engineering Auto Components Pvt. Ltd. A.Ys.2016-17 to 2020-21 Appellant

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