Bhushan Steel Ltd., V. Addl, CIT R-2,

ITA 2104/DEL/2008

• Counselvise Citation: [2009] 114 COUNSELVISE.COM (IT) 9887 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 2 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-08-2009
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 15-07-2009
• Assessment Year: 2005-2006
• Appeal Filed On: 29-05-2008
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: MEETA NAMBIAR
• Keywords: Depreciation; Bad and doubtful debts; Capital receipt
• Section: 115JB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH A NEW DELHI BEFORE SHRI G.E. VEERABHADRAPPA : VICE PRESIDENT; A ND SRHI D.R. SINGH : JUDICIAL MEMBER ITA NO. 2104/DEL/08 ASSTT. YR: 2005-06 M/S BHUSHAN STEELS LTD., VS. ADDL. CIT RANGE-2, (FORMERLY M/S BHUSHAN STEEL NEW DELHI. & STRIPS LTD.), F-BLOCK, 1 ST FLOOR, INTERNATIONAL TRADE TOWER, NEHRU PLACE, NEW DELHI. PAN/GIR NO. AAACB1247M AND ITA NO. 2177/DEL/08 ASSTT. YR: 2005-06 ADDL. CIT RANGE-2, VS M/S BHUSHAN STEELS LTD., NEW DELHI ( ADDRESS AS ABOVE ) ( APPELLANT ) ( RESPONDENT ) ASSESSEE BY : SHRI ASHWANI KUMAR CA RESPONDENT BY : MS. MEETA NAMBIAR CIT DR O R D E R PER G.E. VEERABHADRAPPA, V.P: THESE CROSS APPEALS ARISE OUT OF THE ORDER DATED 1 2-3-2008 OF THE CIT(APPEALS)-V, NEW DELHI FOR A.Y. 2005-06. ITA NO. 2177/DEL/08 ( REVENUES APPEAL FOR A.Y. 200 5-06): 2. THE FIRST GROUND RAISED IN THE REVENUES APPEAL READS AS UNDER: 2 THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DE LETING THE ADDITION OF RS. 61,86,51,505/- MADE ON ACCOUNT OF S ALES TAX SUBSIDY WHICH WAS CLAIMED AS CAPITAL RECEIPTS BY TH E ASSESSEE, BUT RIGHTLY TREATED AS REVENUE RECEIPTS BY THE ASS ESSING OFFICER. 2.1. THE ASSESSEE IS RUNNING A PLANT LOCATED AT SAH IBABAD DISTRICT GHAZIABAD, U.P, A NOTIFIED BACKWARD AREA, CONSEQUEN TLY ENTITLED TO EXEMPTION UNDER THE PROVISIONS OF THE U.P. SALES TA X ACT. THE QUANTUM AND PERIOD OF THE SUBSIDY DEPENDANT ON THE POINT OF TIM E AT WHICH THE PLANT COMMENCED PRODUCTION AND IS DETERMINABLE AS A PERCE NTAGE OF THE FIXED CAPITAL INVESTMENT. IN THE COMPUTATION OF INCOME FI LED ALONG WITH THE RETURN OF INCOME, THE AMOUNT OF SUBSIDY AVAILED BY THE COM PANY DURING THE YEAR UNDER CONSIDERATION HAS BEEN TREATED AS CAPITAL SUB SIDY AND CONSEQUENTLY REDUCED FROM THE TAXABLE INCOME. THE STAND OF THE A SSESSEE BEFORE THE ASSESSING OFFICER WAS THAT ON SIMILAR FACTS, ASSESS EES CLAIM FOR A.Y. 1994- 95 TO 2001-02, HAS BEEN ALLOWED BY THE ITAT. THE AS SESSING OFFICER, HOWEVER, DISALLOWED THE CLAIM OF THE ASSESSEE ON TH E GROUND THAT THE DEPARTMENT HAD NOT ACCEPTED THE CLAIM OF THE ASSESS EE AND THE MATTER WAS SUBJUDICE BEFORE THE HIGH COURT. IN APPEAL, THE C IT(A) ALLOWED THE CLAIM OF THE ASSESSEE BY PLACING RELIANCE ON EARLIER ORDE RS OF THE ITAT IN ASSESSEES OWN CASE AS ALSO THE ORDERS OF CIT(A) I N ASSESSEES OWN CASE FOR A.Y. 2002-03 TO 2004-05. AGGRIEVED, THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. 3 2.2. AFTER HEARING BOTH SIDES WE FIND THAT THE ISSU E STANDS ALREADY CONCLUDED AGAINST THE DEPARTMENT BY THE AFORESAID O RDERS OF THE TRIBUNAL IN ASSESSEES OWN CASE. WE ALSO FIND THAT THE ISSUE I S ALSO COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF SPECIAL BENCH OF TH E ITAT IN THE CASE OF DCIT VS. RELIANCE INDUSTRIES LTD. (2004) 88 ITD 273 . THE ORDER OF THE CIT(A) ON THE ISSUE IN QUESTION BEING IN CONFORMITY WITH EARLIER ORDERS OF THE TRIBUNAL, WE UPHELD THE SAME. 3. GROUND NO. 2 : GROUND NO. 2 IN REVENUES APPEAL READS AS UNDER: THE LD. CIT(A) HAS ERRED IN FACTS AND IN LAW IN DE LETING THE DISALLOWANCE OF DEPRECIATION OF RS. 13,65,468/- MAD E ON ACCOUNT OF BUILDING NOT REGISTERED IN THE NAME OF T HE ASSESSEE. 3.1. THE ASSESSEE CLAIMED DEPRECIATION ON ASSETS, W HICH WERE NOT REGISTERED IN THE ASSESSEES NAME. THERE IS NO DISP UTE AS TO THE FACT THAT THOSE ASSETS WERE USED IN THE COURSE OF ASSESSEES BUSINE SS AND THE CIT(A) FOUND THAT THE ITAT IN THE ASSESSEES OWN CASE FOR ALL TH E EARLIER YEARS I.E. 1994-95 TO 2004-05 HAS DECIDED THE ISSUE IN FAVOUR OF THE A SSESSEE BY FOLLOWING THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE O F PODDAR CEMENT LTD. 226 ITR 625 AND MYSORE MINERALS LTD. 239 ITR 775. 3.2. AFTER HEARING BOTH SIDES WE FIND THAT THE CIT( A) HAS NOT COMMITTED ANY ERROR IN FOLLOWING THE DECISIONS OF THE ITAT IN ASSESSEES OWN CASE WHICH THEMSELVES ARE BASED UPON THE BINDING PRECEDE NT OF THE APEX COURT, AS CITED SUPRA. WE DECLINE TO INTERFERE. 4 4. GROUND NO. 3: THIS GROUND IS GENERAL IN NATURE AND REQUIRES NO ADJUDICATION. ITA NO. 2104/DEL/08 ( ASSESSEE S APPEAL FOR A.Y. 2 005-06): 5. GROUND NO. 1: THIS GROUND RELATES TO THE DISALLO WANCE OF DEPRECIATION OF RS. 8,06,020/- ON ASSETS (POWER LINES), NOT OWNE D BY THE ASSESSEE COMPANY. THE AO DISALLOWED THE CLAIM OF DEPRECIATI ON ON THE GROUND THAT THE ASSESSEE WAS NOT THE OWNER OF THE POWER LINES. IN APPEAL, THE LEARNED CIT(A) AFTER FINDING THAT IN ASSESSEES OWN CASE IN EARLIER YEARS VIDE ORDER DATED 5-1-2005 THE ITAT HAS HELD THAT THE ASSESSEE WAS NOT ENTITLED TO CLAIM DEPRECIATION ON THE POWER LINES OF WHICH THE ASSESS EE IS NOT THE OWNER, HAS UPHELD THE DISALLOWANCE. 5.1. THE LEARNED COUNSEL FOR THE ASSESSEE FAIRLY AD MITTED THAT THE RATIO OF TRIBUNALS DECISION FOR EARLIER YEARS IS AGAINST T HE ASSESSEE. THE LEARNED DR, ON THE OTHER HAND, VEHEMENTLY SUPPORTED THE IMPUGNE D ORDER IN THE LIGHT OF THE TRIBUNALS ORDER. 5.2. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND G ONE THROUGH THE RELEVANT ORDERS ON THE DISPUTED ISSUE. THE FINDINGS IN THE E ARLIER YEARS WERE THAT THE ASSESSEE CLAIMED DEPRECIATION IN RESPECT OF THE AMO UNTS PAID BY THE ASSESSEE COMPANY TO U.P. STATE ELECTRICITY BOARD FOR LONG PO WER LINES AND INSTALLING OF SUB-STATION. THE OWNERSHIP OF THE POWER LINES AN D THE SUB-STATION ALWAYS 5 VESTED WITH U.P. STATE ELECTRICITY BOARD AND THE AS SESSEE WAS NOT THE OWNER. THE ASSESSEE HAD READY CLAIMED THE PAYMENT AS A RE VENUE EXPENDITURE ON THE GROUND THAT THE ASSESSEE HAD NOT ACQUIRED ANY P ROPERTY. THEREFORE, QUESTION OF ALLOWING ANY DEPRECIATION IN RESPECT OF THE SAME EXPENDITURE CANNOT ARISE. THE FACTS IN THIS YEAR BEING IDENTICA L TO THE FACTS THAT WERE CONSIDERED BY THE TRIBUNAL IN EARLIER YEARS, RESPEC TFULLY FOLLOWING THE RATIO LAID DOWN IN EARLIER YEARS, WE UPHOLD THE ORDER OF THE CIT(A) ON THE ISSUE IN QUESTION. 6. GROUND NO. 2: GROUND NO. 2 IN ASSESSEES APPEAL RELATES TO ACTION OF THE AO IN REDUCING A SUM OF RS. 1,72,82,880/- ON AC COUNT OF SYNCHRONIZATION CHARGES FROM THE PROFITS FOR THE P URPOSE OF COMPUTING DEDUCTION U/S 80-IA EVEN THOUGH THE SAID LIABILITY HAD NOT BEEN CRYSTALLIZED AND THE AMOUNTS IN QUESTION HAVE NOT BEEN DEBITED T O THE P&L A/C. 6.1. THE FACTS ARE THAT U.P. POWER CORPORATION HAD LEVIED CERTAIN SYNCHRONIZATION CHARGES, WHICH THE ASSESSEE CHALLEN GED BEFORE THE LUCKNOW BENCH OF HONBLE ALLAHABAD HIGH COURT. THE HIGH COU RT VIDE ITS INTERIM ORDER DATED 28-11-2003 DIRECTED THE ASSESSEE TO PAY HALF OF THE AMOUNT OF SYNCHRONIZATION CHARGES EVERY MONTH TILL THE FINALI ZATION OF THE APPEAL. THE ASSESSEE DID NOT DEBIT THE AMOUNT TO THE P&L A/C ON THE GROUND THAT THE MATER WAS SUBJUDICE AND FINAL LIABILITY OR OTHERWIS E WOULD BE KNOWN ONLY 6 AFTER DISPOSAL OF THE APPEAL. THE ASSESSING OFFICER , HOWEVER, WAS OF THE VIEW THAT THE SYNCHRONIZATION CHARGES CONSTITUTED A N ASCERTAINED LIABILITY AND WOULD HAVE TO BE REDUCED FROM THE PROFITS OF THE EL IGIBLE UNIT. 6.2. THE ASSESSEE ON ITS PART REITERATED THE CONTE NTIONS THAT WERE TAKEN BEFORE THE CIT(A). 6.3. THE REVENUE, ON THE OTHER HAND, ON THE ISSUE S UPPORTED THE ORDERS OF AUTHORITIES BELOW BY ALSO DRAWING SUPPORT FROM THE DECISIONS OF THE HONBLE SUPREME COURT IN THE CASES OF KEDARNATH JUTE MFG. CO. LTD. VS. CIT 82 ITR 363 (SC); AND BHARAT EARTH MOVERS VS. CIT 245 I TR 428 (SC); AS ALSO THE DECISIONS OF HONBLE KERALA HIGH COURT IN THE C ASES OF CIT VS. OEN INDIA LTD. 213 ITR 718; BABY MARINE EXPORT VS. CIT 225 ITR 631; AND ABAD FISHERIES VS. CIT 213 ITR 694. 6.4. WE HAVE CONSIDERED THE RIVAL CONTENTIONS. TH E ASSESSEES MAIN CONTENTION THAT THE ASSESSING OFFICER WAS NOT RIGHT IN REDUCING SYNCHRONIZATION CHARGES FROM THE PROFITS OF THE ELI GIBLE UNITS FOR COMPUTATION OF EXEMPTION U/S 80-IA, CANNOT BE ACCEP TED. THE ASSESSEE IS FOLLOWING MERCANTILE SYSTEM OF ACCOUNTING. THE SYNC HRONIZATION CHARGES THAT WERE LEVIED BY THE U.P. POWER CORPORATION WERE NOT CRYSTALIZED AND CONSEQUENTLY THE ACCRUAL OF LIABILITY HAS TAKEN PL ACE DURING THE RELEVANT PREVIOUS YEAR. ALTHOUGH THE ASSESSEE HAS NOT DEBIT ED THE SAME TO THE P&L 7 A/C THE ASSESSING OFFICER IS DUTY BOUND TO REDUCE T HE SAID SUM FROM THE PROFITS OF THE ELIGIBLE UNIT FOR PROPER COMPUTATION OF DEDUCTION U/S 80-IA OF THE ACT. THE PAYABILITY OF THESE LIABILITIES MAY DEPEND UPON THE DECISION OF THE HIGH COURT BUT THE LIABILITY ITSELF HAS CRYS TALIZED DURING THE YEAR IN QUESTION. IN OUR VIEW THE LEARNED CIT(A) WAS RIGHT IN REJECTING THE MAIN CONTENTION OF THE ASSESSEE. WE SEE NO REASON TO INT ERFERE. 6.5. AS REGARDS THE ALTERNATIVE CONTENTION OF THE ASSESSEE ON THE AFORESAID ISSUE, IT WAS CLAIMED THAT THE ASSESSING OFFICER W AS NOT CORRECT IN REDUCING THE AMOUNT OF SYNCHRONIZATION CHARGES FROM THE PROF ITS OF THE ELIGIBLE UNITS FOR THE PURPOSE OF COMPUTING DEDUCTION U/S 80-IA OF THE ACT WITHOUT APPRECIATING THE FACT THAT THE ASSESSEE HAS NOT DEB ITED SYNCHRONIZATION CHARGES TO THE P&L A/C ON THE GROUND THAT IT WAS NO T ASCERTAINED LIABILITY. IT WAS SUBMITTED THAT IN CASE SYNCHRONIZATION CHARGES WERE TO E REDUCED FROM THE PROFITS OF THE ELIGIBLE UNIT, THE SAME WOULD HA VE BEEN DEBITED TO THE P&L A/C AND SUCH WOULD HAVE TO BE REWORKED ACCORDINGLY . THIS ASPECT HAS BEEN CORRECTLY APPRECIATED BY THE CIT(A) AND THE AO WAS DIRECTED TO VERIFY THE FACTUM OF DEBIT TO THE P&L A/C. IN OUR VIEW THE DIR ECTION GIVEN BY THE LEARNED CIT(A) IS FAIR AND REASONABLE AND DOES NOT CALL FOR ANY INTERFERENCE. . 8 7. GROUND NO. 3: THIS GROUND RELATES TO THE ADDITI ON OF RS. 2,17,512/- ON ACCOUNT OF PROVISION OF DOUBTFUL DEBTS FOR COMPUTIN G BOOK PROFIT OF THE PURPOSE OF MAT. 7.1. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT ISSUE N QUESTION IS SQUARELY COVERED IN FAVOUR O THE ASSESSEE BY THE EA RLIER DECISION OF THE ITAT IN ASSESSEES OWN CASE. IN SUPPORT HE PLACED A COPY OF TRIBUNALS CONSOLIDATED ORDER DATED 17-11-2008 IN ITA NOS. 328 0, 3281/DEL/05 AND 2893/DEL/07 FOR A.Y. 2002-03, 03-04 & 04-05. 7.2. THE LEARNED DR, ON THE OTHER HAND, SUPPORTED T HE ORDERS OF AUTHORITIES BELOW ON THE ISSUE IN QUESTION. 7.3. WE HAVE HEARD THE PARTIES AND FIND THAT THE IS SUE IN QUESTION IS COVERED IN FAVOUR OF THE ASSESSEE BY EARLIER ORDE R OF THE TRIBUNAL (CITED SUPRA). THE ITAT VIDE ITS CONSOLIDATED ORDER DATED 17-11-2008 (SUPRA) HAS DECIDED IDENTICAL ISSUE FOR A.Y. 2002-03, AS UNDER: 16. WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENT IONS AND GONE THROUGH THE IMPUGNED ORDERS. THE FINDINGS OF T HE CIT(A) CLEARLY SHOW THAT THE PROVISIONS FOR BAD AND DOUBTF UL DEBTS WHICH WAS DEBITED TO THE P&L A/C EACH IN RESPECT OF SPECIFIC DEBT AND THERE IS NO ELEMENT OF ESTIMATION THEREIN AND IN RESPECT OF FOREIGN EXCHANGE FLUCTUATION ALSO WHICH IS BASED ON ACTUAL ASCERTAINED LIABILITY AND SUCH SUMS CANNOT THEREFOR E, BE SUBJECT MATTER OF ANY ADDITION WHILE COMPUTING THE BOOK PRO FIT FOR THE PURPOSE F LEVYING MINIMUM ALTERNATE TAX. THE DECISI ON OF THE SUPREME COURT IN APOLLO TYRES VS. CIT 255 ITR 272 D OES NOT 9 PERMIT THE AO TO MAKE ANY OF THE AFORESAID ADJUSTME NTS. THE ORDER OF THE CIT(A), IS, THEREFORE, CONFIRMED. 7.4. NO CHANGE IN FACTS AND CIRCUMSTANCES HAS BEEN POINTED OUT BY EITHER OF THE ARTIES BEFORE US. THEREFORE, RESPECTFULLY FO LLOWING EARLIER ORDER OF THE TRIBUNAL IN ASSESSEES OWN CASE THE GROUND IS DECI DED IN FAVOUR OF THE ASSESSEE AND THE ADDITION OF RS. 2,17,512/- MADE BY THE AO AND SUSTAINED BY THE CIT(A) IS DELETED. 8. GROUND NO. 4: GROUND NO. 4 IN ASSESSEE S APPEAL RELATES TO THE ACTION OF THE AO IN NOT REDUCING THE BOOK PROFITS COMPUTED U/S 115JB BY AN AMOUNT OF RS. 37,21,57,582/-CLAIMED TO BE THE AMOUN T OF PROFIT FROM EXPORT BUSINESS UNDER SECTION 80 HHC OF THE ACT. 8.1. THE LEARNED COUNSEL FOR THE ASSESSEE ALTHOUGH ARGUED THAT DECISIONS OF THE ITAT DATED 7-11-2008 IN ITA NO. 3191/DEL/96 AN D ITA NO. 2477/DEL/07 FOR A.Y. 2003-04 AND 2004-05 RESPECTIVE LY, IN ASSESSEE S OWN CASE, ARE IN FAVOUR OF THE ASSESSEE, WHICH ARE BAS ED ON THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. LAKSHM I MACHINE WORKS (2007) 219 ITR 697 AND THAT OF SPECIAL BENCH OF THE ITAT IN THE CASE OF DCIT VS. SYNCOM FORMULATIONS INDIA LTD. (2007) 106 ITD 227, HE WAS FAIR ENOUGH TO ADMIT THAT DECISION OF THE SPECIAL BENCH OF THE ITAT IN THE CASE OF SYNCOM FORMULATION INDIA LTD. (SUPRA) HAS NOT BE EN APPROVED BY THE 10 HONBLE MUMBAI HIGH COURT IN THE CASE OF ACIT VS. A JANTA PHARMA LTD. (2008) 21 SOT 101 (MUM.). 8.2. AFTER HEARING BOTH THE PARTIES WE FIND NO INFI RMITY IN THE ORDER OF THE CIT(A) ON THE ISSUE IN QUESTION. IN TAKING THIS VIE W WE MAY MENTION THAT WE HAVE FOLLOWED THE RATIO OF DECISION OF HONBLE MUM BAI HIGH COURT IN THE CASE OF AJANTA PHARMA LTD. (SUPRA). 9. GROUND NO. 5: GROUND NO. 5 IN ASSESSEES APPEAL RELATES TO THE DIRECTION OF THE CIT(A) TO REDUCE THE COST OF ACQUI SITION OF THE ASSETS IN TERMS OF THE PROVISIONS OF EXPLANATION (1) TO SECTI ON 43(6) OF THE I.T. ACT. 9.1. THE LEARNED COUNSEL FOR THE ASSESSEE POINTED OUT THAT IDENTICAL ISSUE CAME UP FOR CONSIDERATION BEFORE THE VISAKHAPATNAM BENCH OF THE ITAT IN THE CASE OF SASISRI EXTRACTIONS LTD. VS. ACIT (2008 ) 307 ITR 127 (AT). THE TRIBUNAL IN THAT CASE FOLLOWED THE DECISION OF THE APEX COURT IN THE CASE OF CIT VS. P.J. CHEMICALS LTD. (1994) 210 ITR 830 (SC) FOR ACCEPTING THE SIMILAR CLAIM OF THE ASSESSEE. 9.2. THE LEARNED DR ON THE OTHER HAND, STRONGLY REL IED UPON EXPLANATION (10) TO SECTION 43(1) OF THE I.T. ACT, INSERTED W.E .F. 1-4-1999, READS AS UNDER: EXPLANATION 10 WHERE A PORTION OF THE COST OF AN ASSET ACQUIRED BY THE ASSESSEE HAS BEEN MET DIRECTLY OR I NDIRECTLY BY THE CENTRAL GOVERNMENT OR A STATE GOVERNMENT OR ANY AUTHORITY 11 ESTABLISHED UNDER ANY LAW OR BY ANY OTHER PERSON, I N THE FORM OF A SUBSIDY OR GRANT OR REIMBURSEMENT ( BY WHATEVER N AME CALLED), THEN, SO MUCH OF THE COST AS IS RELATABLE TO SUCH SUBSIDY OR GRANT OR REIMBURSEMENT SHALL NOT BE INCLUDED IN THE ACTUAL COST OF THE ASSET TO THE ASSESSEE. 9.3. IN TERMS OF THE AFORESAID EXPLANATION, IF ANY SUBSIDY IS GRANTED TO MEET THE COST OF THE ASSET DIRECTLY OR INDIRECTLY B Y THE CENTRAL GOVERNMENT OR THE STATE GOVERNMENT OR ANY AUTHORITY ESTABLISHED U NDER THE LAW, THEN SO MUCH OF THE COST AS RELATABLE TO SUCH SUBSIDY OR G RANT OR REIMBURSEMENT SHALL NOT BE INCLUDED IN THE ACTUAL COST OF THE ASS ET TO THE ASSESSEE. 9.4. THE PROVISO TO THE SAID EXPLANATION STATES T HAT WHERE SUCH SUBSIDY CANNOT BE DIRECTLY RELATABLE TO THE ASSET ACQUIRED, SO MUCH OF THE AMOUNT WHICH BEARS TO THE TOTAL SUBSIDY OR REIMBURSEMENT O R GRANT THE SAME PROPORTION AS SUCH ASSET BEARS TO ALL THE ASSETS IN RESPECT OF OR WITH REFERENCE TO WHICH THE SUBSIDY OR GRANT OR REIMBURSEMENT IS S O RECEIVED, SHALL NOT BE INCLUDED IN THE ACTUAL COST OF THE ASSET TO THE ASS ESSEE. 9.5. THE ABOVE PROVISION CLEARLY REQUIRES TO BE E XAMINED WITH REFERENCE TO THE SUBSIDY SCHEME OF THE GOVERNMENT. 9.6. IN THE LIGHT OF THE DECISION OF THE VISAKHAPAT NAM BENCH OF THE ITAT IN THE CASE OF SASISRI EXTRACTION LTD. (SUPRA), ANY SUBSIDY THAT WAS GRANTED TO OFFSET THE COST OF AN ASSET, WOULD FALL WITHIN THE EXPRESSION MET DIRECTLY OR INDIRECTLY IN THE SAID EXPLANATION, WHEREAS THE S UBSIDY RECEIVED MERELY TO ACCELERATE THE INDUSTRIAL DEVELOPMENT OF THE STATE CANNOT BE CONSIDERED AS PAYMENTS MADE SPECIFICALLY TO MEET A PORTION OF THE COST OF THE ASSETS. 12 9.7. IN THE LIGHT OF THE AFORESAID VIEW WE ARE OF THE OPINION THAT SALES-TAX SUBSIDY WHICH WAS RECEIVED BY THE ASSESSEE CANNOT B E TREATED AS A SUBSIDY IN RESPECT THE ASSET EMPLOYED BY THE ASSESSEE. THEREFO RE, THE LEARNED CIT(A) WAS NOT JUSTIFIED IN GIVING A DIRECTION TO THE ASSE SSING OFFICER TO REDUCE THE SAID SUBSIDY FROM THE ACTUAL COST OF THE SUBSIDY U/ S 43(1) OF THE ACT. ACCORDINGLY, GROUND OF THE ASSESSEE IS ALLOWED. 10. IN THE RESULT, REVENUES APPEAL IS DISMISSED AN D THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 28-8-2009. SD/- SD/- (D.R. SINGH ) ( G.E. VEERABHADRAP PA ) JUDICIAL MEMBER VICE PRESIDENT DATED: 28-08-2009. MP COPY TO : 1. ASSESSEE 2. AO 3. CIT 4. CIT(A) 5. DR 13