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Income Tax Appellate Tribunal, KOLKATA ‘B(SMC
Before: Shri P.M. Jagtap
Date of concluding the hearing : July 24, 2018 Date of pronouncing the order : August 29, 2018
O R D E R This appeal filed by the assessee is directed against the order of ld. Commissioner of Income Tax (Appeals)-4, Kolkata dated 23.11.2017 and the solitary issue involved therein relates to the addition of Rs.10,34,772/- made by the Assessing Officer and confirmed by the ld. CIT(Appeals) on account of sales tax incentive received by the assessee by treating the same as revenue receipt.
The assessee in the present case is a Company, which is engaged in the business of manufacturing of medicine. The return of income for the year under consideration was filed by it on 29.09.2012 declaring total income of Rs.9,71,700/-. In the said return, subsidy of Rs.10,34,722/- received in the form of sales tax incentive under West Bengal Industrial Promotion (Assistance to Industrial Unit) Scheme, 1994 was claimed to be exempt being in the nature of capital receipt. During the course of assessment proceedings, the claim of the assessee for the said exemption
Assessment year: 2012-2013 Page 2 of 3 was examined by the Assessing Officer and on such examination he held that the sales tax incentive received by the assessee was in the nature of revenue receipt chargeable to tax. He accordingly made an addition of Rs.10,34,722/- to the total income of the assessee in the assessment completed under section 143(3) vide an order dated 17.02.2015. On appeal, the ld. CIT(Appeals) confirmed the said addition. Aggrieved by the order of the ld. CIT(Appeals), the assessee has preferred this appeal before the Tribunal.
I have heard the arguments of both the sides and also perused the relevant material available on record. The ld. Counsel for the assessee has contended that the amount of subsidy in question in the form of sales tax incentive was actually received by the assessee under 2010 Scheme, but the same was wrongly claimed as receipt under 1994 Scheme. He has contended that the object of 2010 Scheme is clearly defined in the said Scheme and going by the said object, the incentive received under 2010 Scheme is exempt from tax being in the nature of capital receipt. He has requested that the matter may, therefore, be sent back to the Assessing Officer for examining the claim of the assessee for exemption under 2010 Scheme. I am inclined to accept this request made by the ld. Counsel for the assessee and since the ld. D.R. has also not raised any objection in this regard, I set aside the impugned order of the ld. CIT(Appeals) on this issue and restore the matter to the file of the Assessing Officer for deciding the same afresh after verifying the claim of the assessee for exemption on account of sales tax incentive as per the 2010 Scheme.
In the result, the appeal of the assessee is treated as allowed for statistical purposes. Order pronounced in the open Court on August 29, 2018. Sd/- (P.M. Jagtap) Accountant Member Kolkata, the 29th day of August, 2018
Assessment year: 2012-2013 Page 3 of 3 Copies to : (1) M/s. Mendine Pharmaceutical Pvt. Limited, 36A & B, Alipore Road, Kolkata-700 027