THE DEPUTY COMMISSIONER OF INCOME TAX-2(1), RAIPUR V. M/S M/S BAJRANG POWER AND ISPAT LTD, RAIPUR

ITA 172/BIL/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 4288 (ITAT-RAIPUR)
• Duration Of Justice: 2 year(s) 1 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-08-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2010-2011
• Appeal Filed On: 08-07-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R K SINGH
• Keywords: Capital receipt
• Section: 115JB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAIPUR BENCH, RAIPUR BEFORE SHRI R. K. PANDA, ACCOUNTANT MEMBER AND MS. SUCHITRA KAMBLE, JUDICIAL MEMBER ITA NO.172/RPR/2016 ASSESSMENT YEAR : 2010-11 DCIT- 2(1), RAIPUR (CG). VS. M/S BAJRANG POWER AND ISPAT LTD., 522C, URLA INDUSTRIAL AREA, RAIPUR (CG). PAN : AACCB2944D (APPELLANT) (RESPONDENT) DEPARTMENT BY : SHRI R. K. SINGH, CIT(DR) ASSESSEE BY : SHRI AMIT JAIN, ADV. DATE OF HEARING : 07-08-2018 DATE OF PRONOUNCEMENT : 09-08-2018 O R D E R PER R. K. PANDA, AM : THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 28.04.2016 OF CIT(A)- 33, RAIPUR (CG) RELATING TO ASSESSMENT YEAR 2010-11. 2. THE ONLY EFFECTIVE GROUND RAISED BY THE REVENUE READS AS UNDER :- 1. WHETHER IN LAW AND ON FACTS & CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION OF RS.3,41,28,862/- MADE BY THE A.O. ON ACCOUNT OF THE SUBSIDY RECEIVED AS REVENUE RECEIPT. 3. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESSEE IS A COMPANY ENGAGED IN THE BUSINESS OF MANUFACTURING OF SPONGE IRON, BILLETS, BLOOMS, FERRO ALLOYS AND GENERATION OF POWER. IT FILED ITS RETURN OF INCOME ON 05.10.2010 DECLARING 2 ITA NO.172/RPR/2016 NIL INCOME UNDER THE REGULAR PROVISIONS AND RS.28,73,59,903/- AS BOOK PROFIT FOR MAT U/S 115JB OF THE I.T. ACT, 1961. SUBSEQUENTLY, THE RETURN WAS REVISED ON 19.11.2012 DECLARING TOTAL INCOME OF RS.3,70,84,210/- U/S 115JB OF THE I.T. ACT. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTED THAT THE ASSESSEE HAS SHOWN TO HAVE RECEIVED AN AMOUNT OF RS.3,41,28,862/- AS SUBSIDY AND CLAIMED THE SAME AS CAPITAL RECEIPT. ON BEING QUESTIONED BY THE ASSESSING OFFICER TO JUSTIFY THE CLAIM, IT WAS SUBMITTED THAT AS PER INVESTMENT POLICY OF GOVERNMENT OF CHHATTISGARH FOR 2004 TO 2009, THE ASSESSEE IS ENTITLED TO RECEIVE INFRASTRUCTURE DEVELOPMENT/ CAPITAL INVESTMENT SUBSIDY TO THE EXTENT OF 25% OF INFRASTRUCTURE COST FOR ESTABLISHING INDUSTRIES IN INDUSTRIAL AREA, SUBJECT TO MAXIMUM AMOUNT EQUIVALENT TO THE AMOUNT OF COMMERCIAL TAX/ CENTRAL SALES TAX PAID IN THE STATE IN FIVE YEAR PERIOD. THE DISTRICT INDUSTRY CENTRE VIDE LETTER DATED 20.03.2009 HAS SANCTIONED INFRASTRUCTURE DEVELOPMENT/ CAPITAL INVESTMENT SUBSIDY TO THE EXTENT OF RS.12,81,44,310/- SUBJECT TO MAXIMUM AMOUNT EQUIVALENT TO THE AMOUNT OF COMMERCIAL TAX/ SALES TAX PAID IN THE STATE IN FIVE YEAR PERIOD. DURING THE YEAR, THE ASSESSEE HAS PAID THE ABOVE AMOUNT OF RS.3,41,28,862/-, THEREFORE, THE SAME WAS CLAIMED AS CAPITAL SUBSIDY. 4. IT WAS FURTHER SUBMITTED THAT THE ADDITION MADE IN THE PAST WAS DELETED BY THE LD. CIT(A). 5. HOWEVER, THE ASSESSING OFFICER WAS NOT SATISFIED WITH THE EXPLANATION GIVEN BY THE ASSESSEE. HE NOTED THAT THE SUBSIDY WAS RECEIVED AFTER 3 ITA NO.172/RPR/2016 COMMENCEMENT OF PRODUCTION AND, THEREFORE, IT IS THE NATURE OF REVENUE SUBSIDY BECAUSE IT WAS GIVEN TO THE ASSESSEE AFTER COMMENCEMENT OF PRODUCTION TO ENABLE IT TO RUN THE BUSINESS MORE PROFITABLY AND IT IS AN OPERATION SUBSIDY. HE FURTHER NOTED THAT THE ORDER OF THE LD. CIT(A) WAS NOT ACCEPTED BY THE DEPARTMENT AND APPEAL HAS BEEN FILED BEFORE ITAT. HE ACCORDINGLY MADE ADDITION OF RS.3,41,28,862/- TO THE TOTAL INCOME OF THE ASSESSEE. 6. IN APPEAL, THE LD. CIT(A), FOLLOWING THE ORDER OF HIS PREDECESSOR FOR ASSESSMENT YEAR 2009-10 WHICH HAS BEEN CONFIRMED BY THE TRIBUNAL, DELETED THE ADDITION MADE BY THE ASSESSING OFFICER. 7. AGGRIEVED WITH SUCH ORDER OF THE LD. CIT(A), THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. 8. AFTER HEARING BOTH THE SIDES, WE FIND IDENTICAL ISSUE HAD COME UP BEFORE THE TRIBUNAL IN ASSESSEES OWN CASE IN THE IMMEDIATELY PRECEDING ASSESSMENT YEAR AND THE TRIBUNAL IN ITA NO.57/BLPR/2012 ORDER DATED 13.10.2015 HAS UPHELD THE ORDER OF THE LD. CIT(A) DELETING THE ADDITION. WHILE DOING SO, THE TRIBUNAL HAS FOLLOWED THE DECISION OF THE MUMBAI SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF DCIT VS. RELIANCE INDUSTRIES LTD. REPORTED IN 82 TTJ (MUMBAI) (SB) 765. SINCE THE ISSUE RAISED BY THE REVENUE IN THE IMPUGNED APPEAL HAS ALREADY BEEN DECIDED BY THE TRIBUNAL IN ASSESSEES OWN CASE IN THE IMMEDIATELY PRECEDING ASSESSMENT YEAR, THEREFORE, IN ABSENCE OF ANY CONTRARY MATERIAL BROUGHT TO OUR NOTICE, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE 4 ITA NO.172/RPR/2016 LD. CIT(A) DELETING THE ADDITION MADE BY THE ASSESSING OFFICER. THE GROUND RAISED BY THE REVENUE IS ACCORDINGLY DISMISSED. 9. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 09 TH AUGUST, 2018. SD/- SD/- (SUCHITRA KAMBLE) (R. K. PANDA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 09-08-2018. SUJEET COPY OF ORDER TO: - 1) THE APPELLANT 2) THE RESPONDENT 3) THE CIT 4) THE CIT(A) 5) THE DR, I.T.A.T., RAIPUR. BY ORDER //TRUE COPY// SR. PRIVATE SECRETARY ITAT, RAIPUR