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Income Tax Appellate Tribunal, KOLKATA ‘B’ BENCH, KOLKATA
Before: Shri P.M. Jagtap & Shri N.V. Vasudevan
Date of concluding the hearing : November 30, 2016 Date of pronouncing the order : December 02, 2016
O R D E R Per Shri P.M. Jagtap, A.M.: This appeal filed by the assessee is directed against the order of ld. Commissioner of Income Tax (Appeals), Central-I, Kolkata dated 31.01.2014 and the solitary issue raised therein relates to the addition of Rs.1,25,00,000/- made by the Assessing Officer and confirmed by the ld. CIT(Appeals) to the total income of the assessee on account of Power Subsidy issued by the assessee treating the same as revenue receipt chargeable to tax.
The assessee in the present case is a Company, which is engaged in the business of manufacturing of sponge iron billet and rolled products. The return of income for the year under consideration was filed by it on 14.10.2010 declaring total income of Rs.8,94,74,560/-. In the said return, power subsidy of Rs.1,25,00,000/- received during the year under ./2014 Assessment Year: 2010-2011 Page 2 of 3 consideration was claimed to be exempt by the assessee being a receipt of capital nature on the ground that the object of the said assistance was to enable the assessee to set up a new Unit and not for running its business. This claim of the assessee was not found acceptable by the Assessing Officer and following the stand taken in assessee’s own case for earlier years, he added the amount of Rs.1,25,00,000/- received by the assessee on account of power subsidy on total income by treating the same as revenue receipt chargeable to tax. On appeal, the ld. CIT(Appeals) confirmed the said addition made by the Assessing Officer by following his own decision in assessee’s case for assessment years 2006-07, 2008- 09 and 2009-10, wherein a similar issue was decided against the assessee. Aggrieved by the order of the ld. CIT(Appeals), the assessee has preferred this appeal before the Tribunal.
We have heard the arguments of both the sides and also perused the relevant material available on record. It is observed that the similar issue had come up for consideration in assessee’s own case for A.Ys. 2006-07 and 2007-08 and when the two Members constituting the Division Bench of this Tribunal took a different view, the matter was referred to a Third Member. Hon’ble President of ITAT acting as a Third Member has resolved the controversy vide his order dated 19.05.2016 passed in and 665/KOL/2011, whereby he agreed with the view taken by the Accountant Member that the power subsidy granted to the assessee was a capital receipt not chargeable to tax. To arrive at the said conclusion, the Third Member relied on the decision of the Hon’ble Supreme Court in the case of CIT –vs.- Ponni Sugars and Chemicals Limited reported in 306 ITR 392. The Division Bench vide its order dated 15.07.2016 has already given effect to the order of the Third Member and the issue thus has been decided finally in favour of the assessee in asessee’s own case for A.Ys. 2006-07 and 2007-08. Even in A.Ys. 2008-09 and 2009-10, a similar issue has been decided by the Tribunal in favour of the assessee vide its order dated 03.08.2016 passed in ITA Nos. 1074 & 1075/KOL/2013 by following the decision of the Third Member rendered ./2014 Assessment Year: 2010-2011 Page 3 of 3 in assessee’s own case for A.Ys. 2006-07 and 2007-08. This issue involved in the appeal of the assessee thus stands decided in favour of the asessee by the order of Third Member and respectfully following the said binding precedent, we delete the addition of Rs.1,25,00,000/- made on account of power subsidy by holding that the same is a capital receipt not chargeable to tax.
In the result, the appeal of the assessee is allowed. Order pronounced in the open Court on December 02, 2016.