Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, DELHI BENCH “B”, NEW DELHI
Before: MS. SUCHITRA KAMBLE & SH. PRASHANT MAHARISHI
“(a) It is contended that the sum of Rs. 1,72,84,706/- is a Capital Receipt as it has been given to facilitate Agricultural and Village products in order to improve the Agricultural and Village Cottage Industries. (b) It is contended that the lower authorities erred in holding that incentive given under "Vishesh Krishi and Gram Udyog Yojana & 6150/Del/2016 Assessment Year : 2011-12 & 2012-13 (VKGUY)" with an objective to generate employment and promote economic growth is not a Capital Receipt.
2. Without Prejudice to the above, (a) The Lower Authorities are wrong on facts and bad in law in treating a sum of Rs.1,72,84,706/- as profit not eligible for deduction U/s 80-IC. The said sum had been received under "Vishesh Krishi and Gram Udyog Yojana (VKGUY)" being a special scheme for the Agriculture and Gram Udyog Products. (b) That on the facts and in the circumstances of the case, the lower authorities erred in law not allowing deduction U/s 80-IC on incentive granted under "Vishesh Krishi and Gram Udyog Yojana (VKGUY)" of Rs. 1,72,84,706/- allowed to compensate high transport cost incurred by the company. (c) It is contented that incentives granted under "Vishesh Krishi and Gram Udyog Yojana (VKGUY)" have a direct, intrinsic and first degree nexus with the business operations of the appellant. (d) It is contented that incentive were given to offset the high freight cost incurred by the appellant and thus the net effect thereof on the profits is nil. (e) The lower authorities erred in holding that the profits generated out of such incentives are not operational profits.
The lower authorities erred in holding that the said incentive being capital in nature is not to be deducted while arriving Book Profits U/s 115JB.
4. The appellant craves to add, reduce, withdraw, modify and alter the grounds of the appeal.
We are taking facts for A.Y. 2011-12 as the issues are identical in A.Y. 2012-13 as well. The assessee filed return of income of Rs. 4,87,31,026/-, and book profit u/s 115JB of Rs. 5,39,16,440/-. The assessee made claim of Rs. 51,85,412/- on export incentives. The same was not allowed by the Assessing Officer and assessed the income at & 6150/Del/2016 Assessment Year : 2011-12 & 2012-13 Rs. 5,39,16,440/- and taken book profit at Rs. 4,74,51,610/- u/s 115JB of the Act.
3. Being aggrieved by the assessment order, the assessee filed appeal before the CIT(A). The CIT(A) dismissed the appeal of the assessee.
The Ld. AR submitted that in the earlier years for A.Y. 2009-10 and 2010-11 as well as 2011-12, the Tribunal has remanded this issued to the file of the Assessing Officer. The issue contested herein is identical therefore, the Ld. AR prayed that in present appeal as well the issue be restored to the file of the Assessing Officer for deciding a fresh.
The Ld. DR also submitted that only issue in this appeal is against not allowing deduction u/s 80-IC of the Income Tax Act, 1961 (hereinafter called “the Act”) on subsidy which is already remanded back by the Tribunal in earlier assessment years.
We have heard the rival submissions and perused the relevant material available on record. It is found that similar issue about allowing deduction u/s 80IC in respect of similar subsidy came up for consideration before the Tribunal in assessee’s own case for the assessment years 2009-10 and 2010-11. Vide order dated 21.11.2016, the Tribunal in & 347/Del/2014, has sent the matter back to the file of Assessing Officer for deciding it afresh. A copy of such order is available in the paper book. Similar view has been taken by the Tribunal in assessee’s own case in ITA no. 1328/Del/2015 order dated 28.03.2018 for the assessment year 2011-12. Respectfully following the precedent, we set aside the impugned order on this score and remit the matter to the file of Assessing Officer for considering the assessee’s claim of deduction u/s 80IC on the amount of subsidy in the Page | 3 & 6150/Del/2016 Assessment Year : 2011-12 & 2012-13 light of the directions given by the Tribunal in earlier years. Thus, A.Y. 2011-12 is allowed. Further, is also on identical issues, therefore, both the appeals are partly allowed for statistical purpose.
In the result, the both the appeals filed by the assessee are allowed for statistical purposes.
Order pronounced in the open court on 20th day of August, 2019.