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Income Tax Appellate Tribunal, “C” BENCH: KOLKATA
Before: Shri Mahavir Singh, JM & Shri Waseem Ahmed, AM]
ORDER Per Shri Mahavir Singh, JM:
This appeal by revenue is arising out of order of CIT(A)-I, Kolkata in Appeal No.1003/CIT(A)-1/Circle-2/2011-12 dated 26.12.2012. Assessment was framed by DCIT, Circle-2, Kolkata u/s. 143(3) of the Income-tax Act, 1961 (hereinafter referred to as the “Act”) for AY 2009-10 vide its order dated 30.12.2011.
The only issue in this appeal of revenue is against the order of CIT(A) in deleting the addition by holding the receipt of Industrial Promotion Assistance on account of sales tax as capital receipt instead of revenue receipt treated by AO. For this, revenue has raised following two grounds: “1. Whether on the facts and the circumstances of the case the Ld. CIT(A)-1, Kolkata has erred in directing to treat the amount of Rs.26,40,860/- as a “Capital receipt” instead of “Revenue Receipt”? 2. Whether on the facts and the circumstances of the case the Ld. CIT(A)-1, Kolkata has erred in deleting the addition of Rs.26,40,860/- on account of revenue receipt?”
Briefly stated facts are that the assessee is engaged in manufacture of ceramic wares. During the course of assessment proceedings, AO from tax audit report at Sl. No. 13 noted that assessee has a sum of Rs.26,40,860/- under West Bengal Industrial Promotion (Assistance to Industrial Unit) Scheme, 1994 and taken this amount in the Balance Sheet and not credited in the P&L Account. According to AO, the assistance assessee is getting is not supposed to be utilized for acquisition of capital asset like factory, plant and machinery and according to him, this is revenue receipt. According to AO, there is a direct nexus between the company selling its product and collecting sales tax and depositing the same to Govt. account and thereafter, withdrawing back of sales
2 M/s. Allied Ceramics Pvt. Ltd. Ltd. AY 2009-10 tax as Industrial Promotion Assistance. According to him, this is revenue receipt. Aggrieved, assessee preferred appeal before CIT(A), who following the decision of Hon’ble jurisdictional High Court in assessee’s own case in ITA No. 163 of 2006 vide order dated 17.02.2015 wherein following the decision in the case of CIT Vs. Rasoi Ltd. (2011) 335 ITR 438 (Kol) allowed the claim of the assessee. CIT(A) respectfully following the Hon’ble jurisdictional High Court decision allowed the claim of assessee by observing as under: “After careful consideration of the assessment order and the written submission filed by assessee it is noticed that the AO treated an amount of Rs.26,40,860/- received by assessee under West Bengal Industrial Promotion Scheme, 1994 as revenue receipt as against the capital receipt claimed by the assessee. The A/R relied upon ITAT decision in the case of M/s. India Potteries Ltd. (assessee’s own case) and Calcutta High Court decision in the case of CIT Vs. Rasoi Ltd. (335 ITR 438) to support its contention that subsidy received was capital in nature . The facts of the case are similar and are covered by the decisions of jurisdictional tribunal and High court. Therefore, this ground of appeal is allowed.” Aggrieved, revenue came in second appeal before Tribunal.
4. We have heard rival submissions and gone through facts and circumstances of the case. We find that the facts narrated above are undisputed and admittedly, the subsidy has been held to be capital receipt by Hon’ble Calcutta High Court in assessee’s own case. Respectfully following the same, we confirm the order of CIT(A) in allowing the claim of the assessee. Therefore, revenue’s appeal is dismissed.
5. In the result, the appeal of revenue is dismissed.
6. Order is pronounced in the open court on 12.11.2015 Sd/- Sd/- (Waseem Ahmed) (Mahavir Singh) Accountant Member Judicial Member Dated : 12th November, 2015 Jd. Sr. P.S Copy of the order forwarded to: APPELLANT – DCIT, Circle-2, Kolkata.
1. Respondent – M/s. Allied Ceramics Pvt. Ltd.., 91, Lenin Sarani, Kolkata- 2 700 013. The CIT(A), Kolkata 3.
4. CIT Kolkata