ASSISTANT COMMISSIONER OF INCOME-TAX vs. M/S. UNIVERSAL CONSTRUCTION MACHINERY & EQUIPMENTS LTD., PUNE

The notice of appeal was sent to the assessee on 06-06-2018 through RPAD for 30-07-2018. Despite service of notice none has appeared on behalf of the assessee. It appears that the assessee is not keen to pursue the appeal. Accordingly, we proceed to decide the appeal with the assistance of ld. DR and on the basis of material available on record.

The brief facts of the case as emanating from records are : The assessee company is engaged in manufacturing of construction machinery and equipments. During the year relevant to assessment year under appeal, the assessee received subsidy to the tune of Rs.15,73,66,000/- under the Package Scheme of Incentives, 2007 floated by the State Government. The Assessing Officer treated the entire amount of subsidy as revenue receipt and added the same to the income retuned by the assessee.

Shri M.K. Gautam representing the Department vehemently supported the findings of Assessing Officer and prayed for reversing the findings of Commissioner of Income Tax (Appeals). The ld. DR submitted

We have heard the submissions made by ld. 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 ld. 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

In the result, the appeal of Revenue is dismissed.