DCIT 4(2)(2), MUMBAI vs. HARINAGAR SUGAR MILLS LTD., MUMBAI

ITA 5311/MUM/2016Status: DisposedITAT Mumbai02 May 2018AY 2013-142 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 held that the subsidy received by the assessee under the Bihar Incentive Package Scheme is capital in nature and should not be deducted from the Written Down Value (WDV) of plant and machinery. The Tribunal followed its own prior decision which was upheld by the Bombay High Court.

What were the facts?

The Revenue appealed against the CIT(A)'s decision that a subsidy received by the assessee under the Bihar Incentive Package scheme was capital in nature and not deductible from the cost of plant and machinery. This issue had been decided in favour of the assessee by a Coordinate Bench of the Tribunal in a prior assessment year.

What were the issues?

Whether a subsidy received under an incentive package scheme is capital in nature and should be deducted from the WDV of plant and machinery for depreciation purposes.

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “I” Bench, Mumbai

For Appellant: Shri Jayesh Desai

For Respondent: Shri Saurabh Deshpande

Hearing: 2.5.2018Pronounced: 2.5.2018

O R D E R Per B.R. Baskaran (AM) :-

The appeal filed by the Revenue is directed against the order dated 16.6.2016 passed by the learned CIT(A)-9, Mumbai and it relates to A.Y. 2013- 14. The Revenue is aggrieved by the decision of the learned CIT(A) in holding that the subsidy received by the assessee under Bihar Incentive Package scheme is capital in nature and is not required to be deducted from the cost/WDV of plant and machinery.

At the time of hearing, both the parties accepted the fact that this issue has already been decided by the Coordinate Bench of the Tribunal in assessee’s own case relating to A.Y. 2008-09 in dated 31.1.2014, in favour of the assessee holding that the capital subsidy received by the assessee under Bihar Incentive Package Scheme cannot be deducted from WDV of the plant and machinery. The order so passed by the Tribunal for A.Y. 2008-09 has since been upheld by the Hon'ble Bombay High Court, vide its order dated 4.1.2017, passed in Income Tax Appeal No. 1132 of 2014.

2 M/s. Harainagar Sugar Mills Ltd.

We noticed that the learned CIT(A) has followed the decision rendered by the Coordinate Bench in assessee’s own case for A.Y. 2008-09 and 2009-10, for deciding this issue in favour of the assessee. Since the order passed by the Tribunal in A.Y. 2008-09 has been upheld by Hon'ble Bombay High Court, we do not find any reason to interfere with the order passed by the learned CIT(A) on this issue.

In the result, appeal filed by the Revenue is dismissed. Order has been pronounced in the Court on 2.5.2018.

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