Assistant Commissioner of Income-tax, V. M/s. Universal Construction Machinery & Equipments Ltd., Pune

ITA 2312/PUN/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 4318 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 10 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-08-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 03-10-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M K GAUTAM
• Assessee Lawyers: N O N E
• Keywords: Capital receipt

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, PUNE . , , , BEFORE SHRI D. KARUNAKARA RAO, AM AND SHRI VIKAS AWASTHY, JM . / ITA NO . 2 3 12 /P U N/201 6 / ASSESSMENT YEAR : 20 12 - 13 ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 12, PUNE ....... / APPELLANT / V/S. M/S. UNIVERSAL CONSTRUCTION MACHINERY & EQUIPMENTS LTD., UNIVERSAL HOUSE, NEAR OLD JAKAT NAKA, WARJE, KOTHRUD, PUNE 411029 PAN : AAACU7808B / RESPONDENT ASSESSEE BY : N O N E REVENUE BY : SHRI M.K. GAUTAM / DATE OF HEARING : 3 0 - 07 - 201 8 / DATE OF PRONOUNCEMENT : 03 - 0 8 - 201 8 / ORDER PER VIKAS AWASTHY, JM : TH IS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF COMMI SSIONER OF INCOME TAX (APPEALS) - 5, PUNE DATED 30 - 06 - 2016 FOR THE ASSESSMENT YEAR 2012 - 13. 2 ITA NO . 2312/PUN/2016, A.Y. 2012 - 13 2. THE NOTICE OF APPEAL WAS SENT TO THE ASSESSEE ON 06 - 06 - 2018 THROUGH RPAD FOR 30 - 07 - 2018. DESPITE SERVICE OF NOTICE NONE HAS APPEARED ON BEHALF OF THE ASSESSEE. IT APPEARS THAT THE ASSESSEE IS NOT KEEN TO PURSUE THE APPEAL. ACCORDINGLY, WE PROCEED TO DEC IDE THE APPEAL WITH THE ASSISTANCE OF LD. DR AND ON THE BASIS OF MATERIAL AVAILABLE ON RECORD. 3. THE BRIEF FACTS OF THE CASE AS EMANATING FROM RECORD S ARE : THE ASSESSEE COMPANY IS ENGAGED IN MANUFACTURING OF CONSTRUCTION MACHINERY AND EQUIPMENTS. DURING THE YEAR RELEVANT TO ASSESSMENT YEAR UNDER APPEAL , THE ASSESSEE RECEIVED SUBSIDY TO THE TUNE OF RS.15,73,66,000/ - UNDER THE PACKAGE SCHEME OF INCENTIVES, 2007 FLOATED BY THE STATE GOVERNMENT. THE ASSESSING OFFICER TREATED THE ENTIRE AMOUNT OF SUBSI DY AS R EVENUE RECEIPT AND ADDED THE SAME TO THE INCOME RETUNED BY THE ASSESSEE. AGGRIEVED BY THE ASSESSMENT ORDER DATED 25 - 03 - 2015, THE ASSESSEE FILED APPEAL BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS). THE COMMISSIONER OF INCOME TAX (APPEALS) AFTER PLACING RELIANCE ON THE DECISION OF TRIBUNAL IN THE CASE OF M/S. JOHN DEERE EQUIPMENTS PVT. LTD. VS. DY. COMMISSIONER OF INCOME TAX IN ITA NO. 30/PN/2012 FOR ASSESSMENT YEAR 2005 - 06 DECIDED ON 31 - 03 - 2015 HELD THAT THE SUBSIDY RECEIVED BY THE ASSESSEE IS CA PITAL RECEIPT. AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS), THE REVENUE IS IN APPEAL. 4. SHRI M.K. GAUTAM REPRESENTING THE DEPARTMENT VEHEMENTLY SUPPORTED THE FINDINGS OF ASSESSING OFFICER AND PRAYED FOR REVERSING THE FINDINGS OF COMMISSIONER OF INCOME TAX (APPEALS). THE LD. DR SUBMITTED 3 ITA NO . 2312/PUN/2016, A.Y. 2012 - 13 THAT THE REVENUE HAS FILED APPEAL BEFORE THE HONBLE HIGH COURT AGAINST THE ORDER OF TRIBUNAL IN THE CASE OF M/S. JOHN DEERE EQUIPMENTS PVT. LTD. VS. DY. COMMISSIONER OF INCOME TAX (SUPRA). THE LD. DR SUBMITTED THAT THE COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN HOLDING THAT THE SUBSIDY RECEIVED BY THE ASSESSEE IS IN THE NATURE OF CAPITAL RECEIPT. 5. W E HAVE HEARD THE SUBMISSIONS MADE BY LD. DR AND HAVE PERUSED THE MATERIAL AVAILABLE ON RECORD. BEFORE THE ASSESSING OFFICER THE ASSESSEE HAS SUBMITTED THAT DURING THE PERIOD RELEVANT TO THE ASSESSMENT YEAR 2012 - 13 HAS RECEIVED SUBSIDY OF RS.13,37,61,000/ - UP TO 31 - 03 - 2012 AND THE BALANCE AMOUNT OF RS.2,36,05,000/ - IS STATED TO BE RECEIVABLE AS ON 31 - 03 - 2012. THE SUBSIDY WAS SANCTIONED TO THE ASSESSEE UNDER THE PACKAGE SCHEME OF INCENTIVES, 2007 OF THE STATE GOVERNMENT , A GAINST INVESTMENT OF RS.26.77 CRORES MADE BY THE ASSESSEE IN LAND, FACTORY BUILDING, PLANT AND MACHINERY, ELECTRICAL INSTALLATION ETC. THE COMMISSIONER OF INCOME TAX (APPEALS) GRANTED RELIEF TO THE ASSESSEE BY FOLLOWING THE ORDER OF TRIBUNAL IN THE CAS E OF M/S. JOHN DEERE EQUIPMENTS PVT. LTD. VS. DY. COMMISSIONER OF INCOME TAX (SUPRA). WE FIND THAT THE CO - ORDINATE BENCH OF THE TRIBUNAL IN THE AFORESAID CASE HAS PLACED RELIANCE ON THE DECISION IN THE CASE OF COMMISSIONER OF INCOME TAX VS. RELIANCE INDUS TRIES LTD. REPORTED AS 339 ITR 632 , WHEREIN SUBSIDY SANCTIONED TO THE ASSESSEE UNDER SIMILAR PACKAGE SCHEME OF INCENTIVES, 1993 WAS HELD TO BE CAPITAL IN NATURE. THE LD. DR HAS FAILED TO CONTROVERT THE FINDINGS OF COMMISSIONER OF INCOME TAX (APPEALS). IN THE ABSENCE OF ANY CONTRARY MATERIAL ON RECORD , WE UPHOLD THE FINDINGS OF FIRST APPELLATE AUTHORITY IN DELETING THE ADDITION IN RESPECT OF SUBSIDY RECEIVED BY THE ASSESSEE HOLDING 4 ITA NO . 2312/PUN/2016, A.Y. 2012 - 13 IT TO BE CAPITAL IN NATURE. ACCORDINGLY, THE APPEAL OF THE REVENUE IS DISM ISSED BEING DEVOID OF ANY MERIT. 6. IN THE RESULT, THE APPEAL OF REVENUE IS DISMISSED. ORDER PRONOUNCED ON FRIDAY, THE 03 RD DAY OF AUGUST, 201 8 . SD/ - SD/ - ( . /D. KARUNAKARA RAO ) ( / VIKAS AWASTHY) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE; / DATED : 03 RD AUGUST, 2018 RK / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 5, PUNE 4. THE PR. CIT - 4, PUNE 5. , , , / DR, ITAT, B BENCH, PUNE. 6. / GUARD FILE. / / // TRUE COPY// / BY ORDER, / PRIVATE SECRETARY, , / ITAT, PUNE