DCIT, Circle - 3(1) , Kolkata V. M/s. Sova Ispat Limited , Kolkata

ITA 2520/KOL/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 1159 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 5 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-05-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 03-12-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHRIDHRUBAJYITI ROY
• Assessee Lawyers: A K TULSIYAN
• Keywords: Capital asset; Depreciation; Competent authority; Capital receipt; Revised return; Capital expenditure
• Section: 143(3); 73; 13; 263

Judgement Text

1 ITA NO.2520/KOL/2018 SOVAISPAT LIMITED,AY- 2010-11 , B , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH: KOL KATA ().. , .. !,'#$) [BEFORE SHRI P.M. JAGTAP, VICE PRESIDENT (KZ) &SHRI A. T. VARKEY, JM] ITA NO.2520/KOL/2018 ASSESSMENT YEAR: 2010-11 DEPUTY COMMISSIONER OF INCOME-TAX, CIRCLE-3(1), KOLKATA. VS. M/S. SOVAISPAT LIMITED (PAN: AAHCS4673H) APPELLANT RESPONDENT DATE OF HEARING 22.01.2020 DATE OF PRONOUNCEMENT 29.05.2020 FOR THE APPELLANT SHRIDHRUBAJYITI ROY, JCIT, SR. DR FOR THE RESPONDENT SHRI A. K. TULSIYAN, FCA ORDER PER A. T. VARKEY, JM: THIS IS AN APPEAL PREFERRED BY THE REVENUE AGAINST THE ORDER OF LD. CIT(A)-17, KOLKATA DATED 28-09-2018 FOR THE ASSESSMENT YEAR 2010-11. 2. THE SOLE GROUND OF APPEAL OF REVENUE IS AGAINST THE ACTION OF THE LD. CIT(A) IN DELETING THE ADDITION OF INDUSTRIES PROMOTION ASSIS TANCE [IPA] OF RS.1,96,77,000/- RECEIVED AS SUBSIDIES BY ASSESSEE UNDER THE WEST BENGAL INCE NTIVE SCHEME 2000 ( IN SHORT, WBIS 2000) AND TREATING IT AS A CAPITAL RECEIPT WHILE THE AO TREATED THE SAME AS REVENUE RECEIPT AND MADE THE ADDITION. 3. BRIEFLY STATED FACTS AS OBSERVED BY THE AO ARE THAT THE ASSESSEE COMPANY FILED ITS RETURN OF INCOME ON 04.10.2010 DECLARING TOTAL INCO ME OF NIL. SUBSEQUENTLY REVISED RETURN WAS FILED BY THE ASSESSEE ON 29.09.2011 DECLARING T OTAL INCOME OF RS. 2,49,72,665/- AND CLAIMED DEDUCTION IN THE COMPUTATION OF TAXABLE INC OME TREATING IT AS CAPITAL RECEIPT. ASSESSMENT WAS MADE U/S. 143(3) OF THE INCOME TAX A CT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) ON 22.03.2013 AT ASSESSED INCOME OF RS. 2,51,90,665/-. THEREAFTER THE ASSESSMENT WAS REVISED BY LD. PCIT-I, KOLKATA AND CONSEQUENTLY HE GAVE DIRECTION TO THE A. O. VIDE ORDER U/S. 263 OF THE ACT DATED 19.03.2015 TO PASS A FRESH ASSESSMENT ORDER AFTER CONSIDERING 2 ITA NO.2520/KOL/2018 SOVAISPAT LIMITED,AY- 2010-11 HIS OBSERVATION. AS PER DIRECTION OF LD. PCIT -I. K OLKATA THE A.O PASSED THE ORDER U/S. 263/143(3) ON 12.11.2015 ASSESSING THE INCOME AT RS . 4,50,78,115/- BY MAKING ADDITION OF RS. 1,96,77,00/-THE SUBSIDY FROM THE GOVT. OF W.B. & UNPAID LIABILITY OF GRATUITY OF RS. 2. 10,450/-. DURING THE COURSE OF RE-ASSESSMENT THE AO FOUND THAT THE ASSESSEE CREDITED IN P&L ACCOUNT AN AMOUNT OF RS.2,33,51,560/- RECEIVED FROM WEST BENGAL INDUSTRIAL DEVELOPMENT CORPORATION (IN SHORT WBDIC) AS INDU STRIAL PROMOTION ASSISTANCE ( IN SHORT, IPA). ACCORDING TO AO, IN THE ORIGINAL RET URN THE ASSESSEE TREATED IT AS REVENUE RECEIPT BUT IN THE REVISED RETURN THE ASSESSEE CHAN GED TACT AND CLAIMED DEDUCTION OF THIS AMOUNT IN THE COMPUTATION OF TAXABLE INCOME TREATIN G IT AS CAPITAL RECEIPT. ACCORDING AO, THE ASSESSEE SUBMITTED BEFORE HIM THAT THE FINANCIA L ASSISTANCE PROVIDED BY THE WEST BENGAL STATE GOVT. WAS FOR EXPANSION WHICH WAS CAPITAL REC EIPT IN NATURE IN VIEW OF THE DECISION TAKEN BY HON'BLE HIGH COURT OF CALCUTTA IN THE CASE OF CIT-VS- RASOI LIMITED. HOWEVER, ACCORDING TO AO, IN THE CASE OF RASOI LTD., SUBSIDY HAD BEEN RECEIVED BY THE ASSESSEE UNDER WBIS-SCHEME 1994 WHEREAS IN THE INSTANCE CASE, THE SUBSIDY WAS RECEIVED BY THE ASSESSEE UNDER THE WBIS-2000. SO ACCORDING TO AO, THE FACTS OF THE TWO CASES ARE DIFFERENT AND THE DECISION IN THE CASE OF CIT-VS- RASOI LIMITED WAS N OT APPLICABLE IN THE INSTANCE CASE. FURTHER, THE AO OBSERVED THAT IN THE A.Y, 2010-11 T HE ASSESSEE CREDITED THE AMOUNT OF INCENTIVE IN P/L ACCOUNT AS 'OTHER INCOME' TREATING IT AS REVENUE RECEIPT BUT CLAIMED DEDUCTION IN COMPUTATION OF TAXABLE INCOME TREATING IT AS CAPITAL RECEIPT. WHEREAS, IN THE A. Y. 2009-10 THE ASSESSEE HAD RECEIVED SUBSIDY OF RS. 203.70 LAKH FROM WBIDC, CREDITED IT IN P/L ACCOUNT BUT DID NOT CLAIM DEDUCTION FOR SUBS IDY AS REVENUE IN NATURE AND CREDITED IT IN P/L ACCOUNT. ONLY DIFFERENCE WAS THAT IN THE REV ISED RETURN OF A. Y. 2010-11 ASSESSEE CLAIMED DEDUCTION FOR IT IN THE COMPUTATION OF TAXA BLE INCOME. SO ACCORDING TO AO, THERE WAS NO DEVIATION IN TREATMENT OF NATURE OF INCENTIV E IN A. Y. 2010-11, AS THE BOTH THE YEARS INCENTIVE WAS RECEIVED FROM WBIDC UNDER THE SAME SC HEME. ACCORDING TO AO, IT WAS VERIFIED FROM THE WEBSITE OF WBIDC THAT THE ASSESSE E RECEIVED INCENTIVE FROM WBIDC UNDER THE CATEGORY OF MEGA PROJECTS OF WBIS 2000 FO R THE F.Y 2007-08, 2008-09, 2009-10 & 2010-11. THE AO TOOK NOTE THAT ASSESSEE HAD CRE DITED IN P&L ACCOUNT ONLY OF RS. 233.52 LAKH FROM WBIDC ON 22.09.2009 UNDER WBIS 20 00, OUT OF WHICH SUM OF RS. 39.35 LAKH WAS GIVEN UNDER SCIS (STATE CAPITAL INVE STMENT SCHEME) AND REMAINING RS. 196.77 WAS GIVEN AS IPA (INDUSTRIAL PROMOTION ASSIS TANCE). SO ACCORDING TO HIM, ONLY THE 3 ITA NO.2520/KOL/2018 SOVAISPAT LIMITED,AY- 2010-11 AMOUNT OF RS. 39.35 LAKH CAN BE TREATED AS CAPITAL SUBSIDY AS IT WAS SPECIFICALLY GIVEN FOR CAPITAL INVESTMENT AND REMAINING RS. 196.77 LAKH WA S GIVEN FOR INDUSTRIAL PROMOTION ASSISTANCE AND IT NEED TO BE TREATED AS REVENUE REC EIPT AND HENCE ADDED BACK TO THE TOTAL INCOME OF THE ASSESSEE. AGGRIEVED, ASSESSEE PREFE RRED AN APPEAL BEFORE THE LD. CIT(A) WHO DELETED THE ADDITION AS MADE BY AO BY HOLDING T HAT THE INDUSTRIAL PROMOTION ASSISTANCE RECEIVED BY THE ASSESSEE IS TO BE TREATE D AS A CAPITAL RECEIPT. AGGRIEVED, REVENUE HAS PREFERRED THIS APPEAL BEFORE US. 4. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE RECORDS. WE NOTE THAT THE ASSESSEE COMPANY RECEIVED INDUSTRIAL PROMOTION ASSISTANCE ( IPA) AMOUNTING TO RS. 2,33,51,560/- FROM THE GOVT. OF WEST BENGAL UNDER WEST BENGAL INC ENTIVE SCHEME 2000(WBIS-2000). IN THE ASSESSMENT ORDER PASSED PURSUANT TO THE INTERFE RENCE BY THE LD. PCIT, THE AO NOTED AFTER VERIFICATION FROM THE WEBSITE OF WEST BENGAL INDUST RIAL DEVELOPMENT CORPORATION (WBIDC) THAT THE ASSESSEE RECEIVED THE INCENTIVE FR OM WBIDC (WEST BENGAL INDUSTRIAL DEVELOPMENT CORPORATION LTD) UNDER THE CATEGORY OF MEGA PROJECTS OF WBIS-2000 FOR THE F.YS 2007-08, 2008-09, 2009-10 & 2010-11. THE AO N OTED THAT THE ASSESSEE HAS CREDITED IN ITS P & L ACCOUNT ONLY RS. 233.52 LAKHS FROM WBI DC ON 22-09-2009 UNDER WBIS- 2000, OUT OF WHICH SUM OF RS. 39.35 LAKHS WAS GIV EN UNDER SCIS (STATE CAPITAL INVESTMENT SCHEME) AND REMAINING RS. 196.77 LAKHS WAS GIVEN AS IPA (INDUSTRIAL PROMOTION ASSISTANCE). THUS, ACCORDING TO THE AO O NLY AMOUNT OF RS. 39.35 LAKHS CAN BE TREATED AS CAPITAL SUBSIDY AS IT WAS SPECIFICALLY G IVEN FOR CAPITAL INVESTMENT AND REMAINING RS. 196.77 LAKHS WAS REVENUE RECEIPT. AGGRIEVED, TH E ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A), WHO WAS PLEASED TO ALLOW THE CLAIM OF THE ASSESSEE BY TREATING THE REMAINING AMOUNT OF RS. 1,96,77,000/- AS CAPITAL RECEIPT AND DIRECTED DELETION OF ADDITION MADE BY THE AO TO THE TUNE OF RS. 1,96,77,000/-. AGGRIEVED BY T HE ACTION OF THE LD. CIT(A), THE REVENUE PREFERRED THIS APPEAL. 5. THE LEARNED JCIT/ SR. DEPARTMENTAL REPRESENTATIV E ( IN SHORT, THE LD. SR. DR) CONTENDED THAT THE LD. CIT(A) ERRED IN RELYING ON T HE DECISION OF THE HONBLE HIGH COURT OF CALCUTTA IN THE CASE OF CIT VS.- RASOI LIMITED RE PORTED IN 335 ITR 428 (CAL.) ACCORDING TO THE LD. SR. DR IN THAT CASE (RASOI LIMITED ) THE ASSESSEE HAD RECEIVED SUBSIDY ON ACCOUNT OF WEST BENGAL INDUSTRIAL SCHEME 1994 (WBIS-1994). WHEREAS IN THE PRESENT CASE THE 4 ITA NO.2520/KOL/2018 SOVAISPAT LIMITED,AY- 2010-11 ASSESSEE RECEIVED SUBSIDY ON THE BASIS OF WEST BENG AL INCENTIVE SCHEME 2000 (WBIS- 2000). ACCORDING TO THE LD. SR. DR THE ASSESSEE ITS ELF TREATED THE AMOUNT OF SUBSIDY AS REVENUE RECEIPT (IPA) BY CREDITING THE AMOUNT OF IN CENTIVE IN THE P & L ACCOUNT. HOWEVER, ONLY FOR THE PURPOSE OF TAX CLAIM, IT IS CLAIMED AS CAPITAL RECEIPT AND THEREFORE, ACCORDING TO HIM, THE SUBSIDY RECEIVED BY THE ASSESSEE HAS TO BE TREATED AS REVENUE RECEIPT AND, THEREFORE, THE DECISION OF THE LD. CIT(A) NEED TO B E REVERSED AND THE AOS ORDER TO BE RESTORED. 6. PER CONTRA, THE LEARNED AR OF THE ASSESSEE HAS R ELIED UPON THE DECISION OF THE LD. CIT(A) AND ALSO RELIED ON THE TRIBUNALS DECISIONS (I) IN THE CASES OF DCIT VS. M/S. SHYAM STEEL INDUSTRIES LTD. (ITA NO. 602/KOL/2014)DT. 03. 02.2017 FOR THE AY 2010-11, (II) DCIT VS. M/S. BUDGE BUDGE REFINERIES LTD.. (ITA NO. 1552 /KOL/2010)DT.14.10.2016FOR THE AY 2007-08 (III) DCIT VS. M/S. BIRLA CORPORATION LTD. (ITA NOS. 971/KOL/2012& 298/KOL/2013) DT. 25.08.2017 FOR THE AYS 2008-09& 2009-10. ACCORDING TO THE LD. AR, IN ALL THESE THREE (3) CASES THE ISSUE AS TO WHETHER T HE SUBSIDY IS CAPITAL REVENUE PERTAINED TO WEST BENGAL INCENTIVE SCHEME 2000 (WBIS-2000) AND, SINCE, THE ASSESSEE ALSO RECEIVED SUBSIDY FROM VERY THE SAME WEST BENGAL INCENTIVE SC HEME 2000, THEREFORE, THE TRIBUNALS VIEW THAT THE SUBSIDY IS IN THE NATURE OF CAPITAL I S BINDING ON THIS TRIBUNAL. ACCORDING TO HIM, THE LEARNED CIT(A) HAS RELIED ON THESE ORDERS FOR ALLOWING THE APPEAL OF ASSESSEE BY TREATING THE AMOUNT OF RS. 1,96,77,000/- AS CAPITAL RECEIPT IN NATURE. THEREFORE, HE DOES NOT WANT US TO INTERFERE WITH THE IMPUGNED ORDER OF THE LEARNED CIT(A). 7. AFTER HEARING BOTH THE PARTIES AND AFTER CAREFUL LY GOING THROUGH THE RECORDS, WE NOTE THAT THE ASSESSEE COMPANY HAD RECEIVED AN AMOUNT OF RS. 1,96,77,000/- FROM GOVT. OF WEST BENGAL UNDER THE WEST BENGAL INCENTIVE SCHEME 2000 (WBIS-2000) FOR ESTABLISHING INDUSTRY IN THE STATE OF WEST BENGAL PARTICULARLY I N BANKURA DISTRICT. THE STATE GOVERNMENT HAS APPROVED A PACKAGE OF INCENTIVE FOR THE ASSESSE E (M/S. SOVA ISPAT LTD.) VIDE LETTER NO. PPI/MP/0761/2003-14/2000(12) DT. 24.09.2003 ISSUED BY THE MANAGING DIRECTOR, WBIDC APPROVING THE FOLLOWING PACKAGE: 'THE STATE GOVERNMENT HAS APPROVED THE FOLLOWING P ACKAGE FOR SOVAISPAT LTD, BANKURA. THE UNIT IS PROPOSED TO BE SET UP WITH AN INVESTMENT OF RS. 279 CRORE FOR THE PURPOSE OF SETTING UP OF A UNIT FOR MANUFAC TURING OF SPONGE IRON, ROLLED PRODUCTS, FERRO ALLOYS ETC IN WEST BENGAL. 5 ITA NO.2520/KOL/2018 SOVAISPAT LIMITED,AY- 2010-11 PACKAGE: A) INDUSTRIAL PROMOTION ASSISTANCE EQUIVALENT TO UP TO @75% OF THE SALES TAX PAID IN PREVIOUS YEAR ON SALES OF FINANCIAL GOODS S UBJECT TO A MAXIMUM OF 100% OF THE FIXED CAPITAL INVESTMENT FOR A MAXIMUM PERI OD OF 15 YEARS. SUCH ASSISTANCE WILL BE ADJUSTED AGAINST CURRENT LIABILI TIES; B) CAPITAL INVESTMENT SUBSIDY @ 25% OF THE FIXED CA PITAL INVESTMENT SUBJECT TO A MAXIMUM OF RS. 2.5 CRORE. C) ALL OTHER INCENTIVES UNDER WBIS 2000 EXCEPT INTE REST SUBSIDY IN LIEU OF WHICH IPAIS BEING GIVEN. ' FURTHER, THE MODALITIES OF PAYMENT WITH REGARDS TO BENEFIT AS DETAILED ABOVE ARE ALSO PART THE LETTER AS MENTION ABOVE ( COPY ENCLOS ED). 8. BEFORE GOING FURTHER, WE WOULD LIKE TO HAVE LO OKED AT THE RELEVANT SCHEME OF WEST BENGAL INCENTIVE SCHEME, 2000, WHICH ARE REPRODUCED HEREUNDER:- 'SHORT TITLE : THE SCHEME MAY BE CALLED THE WEST BENGAL INCENTIVE SCHEME, 2000 (HEREINAFTER REFERRED AS THE 2000 SCHEME) FOR INDUSTRIAL PROJECTS OF LARGE, MEDIUM AND SMALL SCALE UNITS (HEREINAFTER REFERRED TO AS UNITS) TO BE SET UP IN THE STATE. ELIGIBLE UNIT: 'ELIGIBLE UNIT' MEANS A UNIT IN THE LARGE/MEDIUM/S MALL SCALE SECTOR HAVING REGISTRATION CERTIFICATE ISSUED BY TH E DIRECTORATE OF INDUSTRIES AND ELIGIBILITY CERTIFICATE BY THE W.B.I.D. C. OR REGIS TRATION CERTIFICATE ISSUED BY THE DISTRICT INDUSTRIES CENTRE, AS THE CASE MAY BE; NEW UNIT : 'NEW UNIT' MEANS AN INDUSTRIAL UNIT IN THE LARGE/M EDIUM/SMALL SCALE SECTOR HAVING INVESTMENT IN FIXED CAPITAL ASSETS WH ICH IS ESTABLISHED AND COMMISSIONED BY THE ENTREPRENEUR FOR THE MANUFACTUR E OF GOODS IN WEST BEN AL OR THE FIRST TIME AFTER THE 1 ST JANUARY, 2000 AND IS REGISTERED WITH THE DIRECTORA TE OF COTTAGE MALL SCALE INDUSTRIES/ DIRECTORATE OF TO URISM IS THE CASE MAY BE; CLASSIFICATION OF DEVELOPED AREAS AND BACKWARD ARE AS : FOR THE PURPOSE OF DETERMINATION OF TYPES AND QUANT UM OF INCENTIVE AVAILABLE UNDER THIS SCHEME FOR THE APPROVED PROJECTS, ACCORD ING TO THEIR LOCATION, THE STATE SHALL BE CLASSIFIEDIN THE FOLLOWING GROUPS:- GROUP A - CALCUTTA MUNICIPAL CORPORATION GROUP B - HOWRAH, HOOGHLY, NORTH 24-PARAGANAS, SOUT H 24-PARAGNAS, BURDWAN, NADIA &MIDNAPORE DISTRICTS. GROUP C - MURSHIDABAD, BIRBHUM, PURULIA, BANKURA, M ALDA, COOCH BEHAR, NORTH DINAJPUR, SOUTH DINOJPUR.JALPAIGURI AND DARJEELING DISTRICTS. ' 9. FROM A PERUSAL OF THE AFORESAID RELEVANT PROVISI ON IT IS UNDERSTOOD THAT THE ABOVE SCHEME HAS BEEN LAUNCHED BY THE GOVERNMENT OF WEST BENGAL TO PROMOTE THE ENTREPRENEURS FOR SETTING UP NEW INDUSTRIAL PROJECT/UNIT OF LARGE , MEDIUM AND SMALL SCALE IN THE STATE OF 6 ITA NO.2520/KOL/2018 SOVAISPAT LIMITED,AY- 2010-11 WEST BENGAL. THE MEANING OF UNIT AS PER THE DEFINIT ION GIVEN IN THE SCHEME IS THAT A UNIT IN THE LARGE/MEDIUM/SMALL SCALE SECTOR HAVING REGISTR ATION CERTIFICATE ISSUED BY THE DIRECTORATE OF INDUSTRIES AND ELIGIBILITY CERTIFI CATE BY THE W.B.I.D.C.L (WEST BENGAL INDUSTRIAL DEVELOPMENT CORPORATION LTD. IN THE CASE OF ASSESSEE, THE ASSESSEE HAS SET UP A NEW UNIT IN THE BANKURA DISTRICT OF WEST BENGAL A REA MARKED AS GROUP C IN THE SCHEME (SUPRA). THE ASSESSEE HAS BEEN CLASSIFIED AS A MEG A PROJECT. MEGA PROJECT IS REFERRED IN CLAUSE 18 (PAGE 13) OF WEST BENGAL INCENTIVE SCHEME , 2000, WHICH READS AS UNDER:- 18. MEGA PROJECTS: NOTWITHSTANDING ANYTHING CONTAINED ANYWHERE IN THE SCHEME THE STATE GOVT. MAY CONSIDER GRANTING SPECIAL PACKAGE OF INCENTIVE UNDER THIS SCHEME TO A MEGA PROJECT HAVING DUE REGARD TO THE CHARACTERISTI CS OF THE PROJECT, CASE BY CASE BASIS, IN THE FOLLOWING AREAS: I) SIZE OF INVESTMENT II) SPECIAL NATURE OF THE INDUSTRY III) EMPLOYMENT POTENTIALITY, IV) DOWN-STREAM EFFECT OF THE INDUSTRY, V) ANCILLARISATION EFFECT OF THE INDUSTRY, VI) EXPORT POTENTIALITY' FURTHER, THE TERM 'MEGA UNIT' AS BEEN DEFINED IN CL AUSE 3 (XIII) ON PAGE 2 OF THE WEST BENGAL INCENTIVE SCHEME, 2000 IS REPROD UCED AS UNDER: 'MEGA UNIT' MEANS AN ELIGIBLE UNIT OF SPECIAL CHARA CTERISTICS SET UP ON OR AFTER THE 1 ST JANUARY, 2000 WITH INVESTMENT EXCEEDING RS. 250.00 CRORES/RS. 25 CRORESW.E.F01.07.2001, (VIDE NOTIFICATION NO. 538-C I/H DT. 14.08.2001)' 10. SINCE THE ASSESSEE FALLS UNDER THE DEFINITION ( SUPRA), IT QUALIFIED AS A MEGA UNIT PROJECT UNDER THE WEST BENGAL INCENTIVE SCHEME 2000 . SINCE THE PROJECT OF THE ASSESSEE WAS A MEGA PROJECT AND THE ASSESSEE FULFILLED THE CONDI TION LAID DOWN IN THE SCHEMEOF WBIS- 2000 (WEST BENGAL INCENTIVE SCHEME, 2000) ISSUED BY THE DEPARTMENT OF COMMERCE & INDUSTRIES, GOVERNMENT OF WEST BENGAL, THE GOVERNME NT APPROVED INDUSTRIAL PROMOTION ASSISTANCE (IPA) TO THE ASSESSEE @ 75% OF SALES TAX /VAT PAID ON SALE OF FINISHED GOODS SUBJECT TO MAXIMUM 100 FOR A MAXIMUM PERIOD OF 15 Y EARS. ACCORDING TO THE ASSESSEE WHATEVER SALES TAX COLLECTED BY IT IS FIRST DEPOSIT ED TO THE CONCERNED DEPARTMENT AND LATER ONLY THE ASSESSEE BECOMES ENTITLED FOR THE SUBSID Y AS INDUSTRIAL PROMOTION ASSISTANCE. ACCORDING TO THE ASSESSEE, IT HAS BEEN GRANTED ASSI STANCE (IPA) IN THE FORM OF SALES TAX SUBSIDY WAS ON CAPITAL ACCOUNT AND THE AO OUGHT NO T TO HAVE TREATED IT AS REVENUE RECEIPT. WE NOTE THAT THE LD. CIT(A) WHILE ADJUDICATING THE APPEAL OF THE ASSESSEE HAS RELIED UPON THE 7 ITA NO.2520/KOL/2018 SOVAISPAT LIMITED,AY- 2010-11 DECISIONS OF THE TRIBUNAL IN DCIT VS. M/S. SHYAM ST EEL INDUSTRIES LTD. (SUPRA), DCIT VS. M/S. BUDGE BUDGE REFINERIES LTD (SUPRA) AND DCIT VS . M/S. BIRLA CORPORATION LTD (SUPRA)AND DECIDED THE CASE IN FAVOUR OF THE ASSESS EE. SINCE IN THE AFORESAID CASES (SUPRA) THE TRIBUNAL HAS UPHELD THE RESPECTIVE ASSESSEES CLAIM THAT THE SUBSIDY IT RECEIVED FROM THE GOVT. OF W.B UNDER THE WEST BENGAL INCENTIVE SC HEME 2000 (WBIS-2000)WAS OF CAPITAL NATURE. WE NOTE THAT THE TRIBUNAL IN THE C ASE OF BIRLA CORPORATION LTD HAD ADJUDICATED SIMILAR ISSUE, WHEREIN ALSO THE ASSES SEE IN THAT CASE CLAIMED THE INDUSTRIAL PROMOTION ASSISTANCE (IPA) IT HAD RECEIVED IPA FRO M WEST BENGAL INCENTIVE SCHEME 2000 WHICH IT CLAIMED AS CAPITAL IN NATURE. THE TRIBUNAL WHILE ADJUDICATING THIS ISSUE UPHELD THE ASSESSEES CLAIM BY HOLDING AS UNDER:- 4. TAXABILITY OF INDUSTRIAL PROMOTION ASSISTANCE GROUND NOS. 4 & 5 OF REVENUE APPEAL FOR ASST YEAR 2 008-09 GROUND NO. 5 OF ASSESSEE APPEAL FOR ASST YEAR 2008- 09 GROUND NO. 3 OF REVENUE APPEAL FOR ASST YEAR 2009-1 0 GROUND NO. 5 OF ASSESSEE APPEAL FOR ASST YEAR 2009- 10 THE FACTS OF ASST YEAR 2008-09 ARE TAKEN UP FOR ADJ UDICATION AND THE DECISION RENDERED THEREON WOULD APPLY WITH EQUAL FORCE TO ASST YEAR 2 009-10 ALSO EXCEPT WITH VARIANCE IN FIGURES. THE BRIEF FACTS OF THIS ISSUE IS THAT THE LD AO OBS ERVED THAT ASSESSEE HAD RECEIVED INDUSTRIAL PROMOTION ASSISTANCE PROVIDED TO ONE OF ITS UNIT AT DURGAPUR UNDER WEST BENGAL INCENTIVE SCHEME, 2000 TO THE TUNE OF RS 2,5 5,27,120/- WHICH WAS CLAIMED BY IT AS A CAPITAL RECEIPT BY WAY OF A SEPARATE LETTER DATED 8.12.2010 DURING ASSESSMENT PROCEEDINGS. IT WAS SUBMITTED THAT THE 2000 SCHEME WAS FORMULATED BY THE WEST BENGAL STATE GOVERNMENT FOR THE PROMOTION OF INDUSTRY IN T HE STATE. IT WAS APPLICABLE IN RESPECT OF UNITS TO BE SET UP AND ALSO TO EXPANSION PROJECT S OF EXISTING UNITS HAVING INVESTMENT IN FIXED ASSETS. INDUSTRIAL PROJECTS IN THE LARGE AND MEDIUM SECTORS WERE ELIGIBLE FOR THE INCENTIVES UNDER THE SCHEME PROVIDED SUCH PROJECTS WERE COVERED BY A DETAILED FEASIBILITY REPORT/PROJECT REPORT AND THE PROJECT H AD BEEN APPROVED AND SANCTIONED BY THE FINANCIAL INSTITUTIONS/BANKS. IT WAS FOUND THAT THE SUBSIDY WAS IN THE FORM OF RELAXATION OF THE TAX WAS MORE FOR ENCOURAGEMENT TO ENTREPRENE URS TO ESTABLISH/ EXPAND INDUSTRIAL UNIT IN THE STATE OF WEST BENGAL RATHER THAN TOWARD S ACQUISITION OF SPECIFIC CAPITAL ASSETS IN THAT INDUSTRIAL UNIT. THE INTENTION WAS WITH THE OBJECT OF SUPPLEMENTING TRADE RECEIPT AND PROFITS OF THE ASSESSEE COMPANY RATHER THAN TO ASSIST THE ASSESSEE IN ACQUIRING A CAPITAL ASSET, ACCORDINGLY, IT WAS INCIDENTAL TO CA RRYING ON THE BUSINESS OF THE ASSESSEE. MOREOVER, THE SUBSIDY IN QUESTION HAS BEEN GRANTED TO THE ASSESSEE ONLY AFTER COMMENCEMENT OF PRODUCTION AND SUBSIDY GRANTED AFTE R COMMENCEMENT OF PRODUCTION IS OPERATION SUBSIDY WHICH IS OF REVENUE NATURE. THE A SSESSEE'S CLAIM FOR TREATING THE SUBSIDY IN THE NATURE OF CAPITAL RECEIPT IS THEREFO RE NOT ACCEPTED. FURTHER, ANY CLAIM NOT MADE THROUGH I.T. RETURN OR REVISED RETURN, SAME IS NOT ALLOWABLE BY AO. THE HON'BLE SUPREME COURT IN CASE OF GOETZE (INDIA) LTD. IN 284 ITR 323, CONFIRMED THIS DECISION. 8 ITA NO.2520/KOL/2018 SOVAISPAT LIMITED,AY- 2010-11 THEREFORE, FRESH CLAIM OF REDUCING THE AMOUNT IN CO MPUTATION FURNISHED WITH RETURN IS NOT ACCEPTED . 4.1. THE ASSESSEE EXPLAINED BEFORE THE LD CITA AS B ELOW:- '5.1 THE NEXT GROUND RAISES THE CONTENTION THAT IND USTRIAL PROMOTION ASSISTANCE OF RS.4,01,64,232/- RECEIVED FROM THE WEST BENGAL STAT E GOVERNMENT IS A CAPITAL RECEIPT AND CANNOT BE SUBJECTED TO TAX. THE SAID AMOUNT WAS RECEIVED BY THE ASSESSEE IN TERMS OF THE WEST BENGAL INCENTIVE SCHEME, 2000 (HEREINAFTER REFERRED TO AS 'THE 2000 SCHEME ') (PAGE73 OF THE PAPER BOOK) FOR EXPANSION UNDERTAKEN AT THE ASSESSEE'S DURGAPUR CEMENT WORKS INVOLVING AN INVESTMENT OF RS.100 CRORES. 5.2 THE ASSESSING OFFICER HAS ERRONEOUSLY MENTIONED THE FIGURE OF ASSISTANCE AS RS.2,55,27,1201- WHICH IS ACTUALLY THE AMOUNT OF AS SISTANCE PERTAINING TO THE PRECEDING YEAR. THE CORRECT AMOUNT OF ASSISTANCE FOR THE ASSE SSMENT YEAR 2008- 09 IS AS MENTIONED IN PARAGRAPH 5.1 HEREINABOVE. THE FINDINGS OF THE A SSESSING OFFICER FOR TREATING THE AMOUNT OF ASSISTANCE AS A REVENUE RECEIPT ARE THE S AME AS THOSE IN RESPECT OF INTEREST SUBSIDY. ADDITIONALLY, THE ASSESSING OFFICER HAS OB SERVED THAT SINCE THE AMOUNT WAS NOT CLAIMED IN THE RETURN BUT BY A LETTER IN COURSE OF THE ASSESSMENT PROCEEDINGS, IN VIEW OF THE JUDGMENT OF THE HON 'BLE SUPREME COURT IN GOETZ E (INDIA) LTD. V CIT, (2006) 284 ITR 323 (SC), THE CLAIM CANNOT BE ALLOWED. 5.3 IT IS SUBMITTED THAT THE DECISION OF THE HON 'B LE SUPREME COURT IN GOETZE (INDIA) 'S CASE (SUPRA) HAS NO APPLICATION IN THE FACTS AND CI RCUMSTANCES OF THE INSTANT CASE. IN THAT CASE, THE ASSESSEE SOUGHT TO MAKE A CLAIM FOR DEDUC TION BY A LETTER WITHOUT REVISING THE RETURN. IT IS SUBMITTED THAT THE INSTANT CASE IS NO T ONE OF ANY CLAIM FOR DEDUCTION. THE ASSESSEE'S CONTENTION IS THAT INDUSTRIAL PROMOTION ASSISTANCE OF RS.4, 01,64,232/- IS A CAPITAL RECEIPT AND CANNOT FORM PART OF THE TAXABLE INCOME. IT IS SETTLED LAW THAT THE SUBJECT CANNOT BE TAXED UNLESS THE CHARGING PROVISI ON CLEARLY IMPOSES THE OBLIGATION. EVEN IF AN ASSESSEE INCLUDES A CAPITAL RECEIPT IN H IS RETURN, THAT WOULD NOT PRECLUDE HIM FROM CLAIMING THAT SUCH RECEIPT IS NOT TAXABLE. THE RE CANNOT BE ANY ESTOPPEL AGAINST THE STATUTE. IF IN LAW AN ITEM IS NOT TAXABLE, NO AMOUN T OF ADMISSION OR MISAPPREHENSION CAN MAKE IT TAXABLE. IT IS ALWAYS OPEN TO AN ASSESSEE T O TAKE THE PLEA THAT THE FIGURE THOUGH SHOWN IN THE RETURN IS NOT TAXABLE IN LAW. SUCH TAX ABILITY CANNOT BE DECIDED ON THE BASIS OF ANY ADMISSION. RELIANCE IN THIS BEHALF IS PLACED ON THE DECISIONS OF THE HON 'BLE SUPREME COURT IN CIT V AJAX PRODUCTS LTD., (1965) 5 5 ITR 741 (SC) AND THOSE OF THE HON 'BLE CALCUTTA HIGH COURT IN CIT V BHASKARMITTER , (1974) 73 TAXMAN 437 (CAL) AND MAYNAKPODDAR (HUF) V WTO, (2003) 262 ITR 633 (CAL). THE SAME VIEW HAS ALSO BEEN TAKEN BY THE HON 'BLE TRIBUNAL IN THE ASSESSEE'S OW N CASE FOR THE ASSESSMENT YEAR 2006- 07. 5.4 THE 2000 SCHEME WAS FORMULATED BY THE WEST BENG AL STATE GOVERNMENT FOR THE PROMOTION OF INDUSTRY IN THE STATE. THE 2000 SCHEME WAS FOR INDUSTRIES IN LARGE, MEDIUM, SMALL SCALE AND TOURISM SECTORS. THE 2000 S CHEME PROVIDED FOR SPECIAL PACKAGE OF BENEFITS FOR MEGA PROJECTS HAVING A MINI MUM INVESTMENT OF RS.25 CRORES. DISTRICTS IN THE STATE WERE PUT UNDER DIFFERENT GRO UPS. GROUP A COMPRISED AREA FALLING UNDER CALCUTTA MUNICIPAL CORPORATION AND NO INCENTI VE WAS AVAILABLE FOR ANY INDUSTRY LOCATED IN GROUP A. 9 ITA NO.2520/KOL/2018 SOVAISPAT LIMITED,AY- 2010-11 5.5 THE 2000 SCHEME WAS APPLICABLE IN RESPECT OF UN ITS TO BE SET UP AND ALSO TO EXPANSION PROJECTS OF EXISTING UNITS HAVING INVESTM ENT IN FIXED ASSET. COMMERCIAL PRODUCTION IN THE NEW UNIT OR THE EXPANDED PORTION OF AN EXISTING UNIT WAS REQUIRED TO COMMENCE ON OR AFTER JANUARY 1, 2000. IN CASE OF EX PANSION, THE FIXED CAPITAL INVESTMENT MADE HAD TO RESULT IN INCREASE OF THE TOTAL VALUE O F THE FIXED CAPITAL INVESTMENT BY NOT LESS THAN 25% OF THE NET VALUE OF FIXED ASSETS (LAN D, BUILDING AND PLANT AND MACHINERY) AS ON JANUARY 1, 2000 OR RS.50 LAKHS, WHICHEVER WAS LE SS. INDUSTRIAL PROJECTS IN THE LARGE AND MEDIUM SECTORS WERE ELIGIBLE FOR THE INCENTIVES UNDER THE SCHEME PROVIDED SUCH PROJECTS WERE COVERED BY A DETAILED FEASIBILITY REP ORT/PROJECT REPORT AND THE PROJECT HAD BEEN APPROVED AND SANCTIONED BY THE FINANCIAL INSTI TUTIONS/BANKS. IF THE FINANCE FOR THE PROJECT WAS TO COME FROM THE ENTREPRENEUR'S OWN RES OURCES, THE WEST BENGAL INDUSTRIAL DEVELOPMENT CORPORATION LTD. (HEREINAFTER REFERRED TO AS 'WBIDC') HAD TO BE SATISFIED ABOUT THE ARRANGEMENT OF SUCH FINANCE. CLAUSE 18 OF THE 2000 SCHEME DEALT WITH MEGA PROJECTS AND PROVIDED THAT THE STATE GOVERNMENT WOU LD CONSIDER GRANTING SPECIAL PACKAGE OF INCENTIVES TO A MEGA PROJECT HAVING REGA RD TO THE CHARACTERISTICS OF THE PROJECT ON A CASE BY CASE BASIS IN THE FOLLOWING AR EAS:- (I) SIZE OF INVESTMENT; (II) SPECIAL NATURE OF INDUSTRY; (III) EMPLOYMENT POTENTIALITY; (IV) DOWN-STREAM EFFECT OF INDUSTRY; (V) ANCILLARISATION EFFECT OF THE INDUSTRY; (VI) EXPORT POTENTIALITY. 5.6 THE ASSESSEE'S UNIT FELL UNDER GROUP B, ITS EXP ANSION PROJECT QUALIFIED AS A MEGA PROJECT AND IT WAS ELIGIBLE FOR THE INCENTIVES UNDE R THE 2000 SCHEME. THE EXPANSION UNDERTAKEN BY THE ASSESSEE INVOLVED INCREASE IN MAN UFACTURING CAPACITY OF CEMENT FROM 0.6 MILLION TONNES PER ANNUM TO 1.6 MILLION TONNES PER ANNUM AND WAS PRACTICALLY A NEW UNIT. THE ASSESSEE WAS DULY REGISTERED UNDER THE 20 00 SCHEME WITH THE DIRECTORATE OF INDUSTRIES, WEST BENGAL. IN THE REGISTRATION CERTIF ICATE DATED APRIL 29, 2005, IT WAS STIPULATED THAT THE ASSESSEE WOULD BE ELIGIBLE OR I NDUSTRIAL PROMOTION ASSISTANCE ONLY AFTER THE TOTAL INVESTMENT CROSSED THE LIMIT OF RS. 25 CRORES AND ON STARTING COMMERCIAL PRODUCTION. 5.7 WBIDC ISSUED AN ELIGIBILITY CERTIFICATE DATED A UGUST 30, 2005 TO THE ASSESSEE FOR INCENTIVES UNDER THE 2000 SCHEME AS A MEGA PROJECT. THE SAID CERTIFICATE RECORDED THE FACT THAT THE ASSESSEE HAD MADE ARRANGEMENTS FOR FI NANCING THE PROJECT SATISFACTORY TO WBIDC. THE SAID CERTIFICATE WAS VALID FOR A PERIOD OF TWO YEARS FROM THE DATE OF ISSUE. IF EFFECTIVE STEPS FOR ESTABLISHMENT OF THE PROJECT WERE NOT TAKEN WITHIN THE SAID PERIOD, THE VALIDITY PERIOD OF THE CERTIFICATE WAS NOT TO B E EXTENDED UNLESS AN ORDER WAS PASSED IN THAT BEHALF AFTER CONSIDERING THE MERITS OF THE CAS E AND SUBJECT TO OTHER CONDITION STIPULATED IN THE 2000 SCHEME AND THE ORDER OF EXTE NSION. IT WAS STIPULATED IN THE ELIGIBILITY CERTIFICATE THAT DURING THE VALIDITY PE RIOD THEREOF, THE UNIT SHALL FURNISH TO THE DIRECTORATE OF INDUSTRIES, WEST BENGAL AND WBIDC TH E FOLLOWING INFORMATION :- (A) DATE OF TAKING EFFECTIVE STEP; (B) QUARTERLY PROGRESS REPORT ON THE IMPLEMENTATION OF THE PROJECT, PHYSICAL TARGET ACHIEVED AND NEW FIXED CAPITAL INVESTMENT MADE; (C) DATE OF COMMENCEMENT OF POWER SUPPLY FOR PRODUC TION PURPOSES; 10 ITA NO.2520/KOL/2018 SOVAISPAT LIMITED,AY- 2010-11 (D) DATE OF STARTING COMMERCIAL PRODUCTION/OPERATI ON; (E) TOTAL NUMBER AND DATE OF APPOINTMENT OF NEW/ADD ITIONAL FACTORY WORKERS IN THE UNIT: (F) YEARLY REPORT ON THE WORKING AND PERFORMANCE OF THE UNIT; 5.8 ONE OF THE CONDITIONS STIPULATED IN THE SAID EL IGIBILITY CERTIFICATE WAS THAT A TRUE ACCOUNT OF THE VALUE OF FIXED ASSETS ACQUIRED, SOLD OR OTHERWISE DISPOSED OF HAD TO BE KEPT . CONDITIONS (III) AND (IV) OF THE ELIGIBILITY CERTIFICATE: (III) IF THE INDUSTRIAL UNIT FOR WHICH THIS ELIGIBI LITY CERTIFICATE IS ISSUED WITHOUT OBTAINING PRIOR WRITTEN PERMISSION FROM THE STATE GOVERNMENT OR ITS AUTHORISED AGENT AT LEAST SIXTY DAY PRIOR TO THE EVENT; (A) DISCONTINUES TAKING EFFECTIVE STEPS FOR ESTABLI SHING THE MANUFACTURING UNIT; (B) STOPS PRODUCTION WITHIN YEAR OF COMMENCEMENT OF PRODUCTION/OPERATION; (C) PERMANENTLY CLOSES THE UNIT WITHIN A PERIOD OF FIVE YEARS OF COMMENCEMENT OF PRODUCTION/OPERATION; (D) SELL OR OTHERWISE DISPOSES OFF WHOLLY OR IN PAR T OR LEASES OUT WHOLLY OR IN PART OR AN CHANGE IN THE OWNERSHIP OF THE FIXED ASSETS IS EFFE CTED; (E) CLOSES OR SHIFTS THE UNIT TO A NEW LOCATION, AN D/OR (J) CHANGES ITS NAME AND/OR ITS CONSTITUTION; THE AMOUNT OF INTEREST-FREE LOANS AND OTHER CHARGES (IF ANY) OUTSTANDING ON THE DATE OF OCCURRENCE OF SUCH EVENT AND OTHER BENEFIT/BENEFITS ALLOWED UNDER THE 2000 SCHEME SHALL BE IMMEDIATELY RECOVERABLE FROM THE UNIT. IV) IN CASE OF FAILURE OF PAYMENT OF ANY AMOUNT OF INSTALLMENT OF LOANS SANCTIONED AND DISBURSED UNDER THE 2000 SCHEME BY DUE DATE, THE EN TIRE LOAN OR ITHE BALANCE OF THE ENTIRE LOAN, SHALL BE DEEMED TO BE DUE ON THE DATE OF DEFAULT AND ACTION MAY BE TAKEN FOR RECOVERY THEREOF AT ONCE. ' 5.9 THE AMOUNT OF INDUSTRIAL PROMOTION ASSISTANCE T O WHICH THE ASSESSEE WAS ENTITLED WAS QUANTIFIED AT 75% OF THE SALES TAX PAID IN THE PRECEDING YEAR AND THE AMOUNT OF ASSISTANCE WAS TO BE ADJUSTED AGAINST THE SALES TAX LIABILITY OF THE YEAR OF CLAIM. THE PERIOD FOR WHICH SUCH ASSISTANCE WAS AVAILABLE WAS TWELVE YEARS IF COMMERCIAL PRODUCTION COMMENCED WITHIN JUNE 30, 2005 AND TEN Y EARS IF COMMERCIAL PRODUCTION COMMENCED BETWEEN JULY 1, 2005 TO DECEMBER 31, 2005 . THE ASSESSEE COMMENCED COMMERCIAL PRODUCTION IN DECEMBER, 2005 AND AS SUCH WAS ENTITLED TO THE ASSISTANCE FOR 10 YEARS. IT IS SUBMITTED THAT IT IS EVIDENT FROM T HE PROVISIONS OF THE 2000 SCHEME AND THE REGISTRATION AND ELIGIBILITY CERTIFICATE GRANTED TO THE ASSESSEE THAT THE OBJECT FOR WHICH THE ASSISTANCE WAS GRANTED WAS CLEARLY TO ENABLE THE SE TTING UP OF A NEW UNIT OR EXPANSION OF AN EXISTING UNIT AND THE ASSISTANCE WAS ON CAPITAL ACCOUNT. THE ASSISTANCE WAS GRANTED BECAUSE OF CAPITAL INVESTMENT IN ESTABLISHING NEW U NITS OR EXPANDING EXISTING UNITS PROJECTS WITH INVESTMENT OF RS. 25 CRORE AND ABOVE WERE CLASSIFIED AS MEGA PROJECTS. THE UNIT COULD NOT BE DISPOSED OF OR CLOSED AND HAD TO REMAIN IN PRODUCTION FOR THE SPECIFIED PERIOD. IN CASE OF DEFAULT, THE BENEFIT ALLOWED UND ER THE 2000 SCHEME WAS TO BECOME IMMEDIATELY RECOVERABLE. IF LOANS WERE NOT REPAID B Y DUE DATE, THE ENTIRE LOAN/BALANCE LOAN WAS TO BECOME DUE ON THE DATE OF DEFAULT AND A CTION FOR RECOVERY COULD BE TAKEN IMMEDIATELY. MEASUREMENT OF THE AMOUNT OF ASSISTANC E WITH REFERENCE TO THE SALES TAX PAID AND PAYMENT OF THE ASSISTANCE BY WAY OF ADJUST MENT AGAINST THE SALES TAX LIABILITY 11 ITA NO.2520/KOL/2018 SOVAISPAT LIMITED,AY- 2010-11 MERELY RELATE TO THE FORM OR MECHANISM THROUGH WHIC H THE ASSISTANCE IS GRANTED AND DO NOT DETERMINE THE CHARACTER OF THE SUBSIDY. THE AMO UNT OF SALES TAX PAID IS ONLY THE MEASURE FOR DETERMINING THE QUANTUM OF ASSISTANCE. IT IS NOT A CASE OF RELAXATION OF TAX OR SUPPLEMENTING OF TRADE RECEIPT/PROFITS AS ERRONEOUS LY HELD BY THE ASSESSING OFFICER. FURTHER, THE TIME OF PAYMENT OF THE ASSISTANCE IS A LSO OF NO RELEVANCE. IT IS SUBMITTED THAT THE TREATMENT OF THE ASSISTANCE AS A REVENUE RECEIP T BY THE ASSESSING OFFICER IS CONTRARY TO THE LAW LAID DOWN BY THE HON'BLE SUPREME COURT A ND THE HON'BLE HIGH COURTS INCLUDING THE JURISDICTIONAL HIGH COURT'. 4.2. THE LD CITA BY FOLLOWING THE TRIBUNAL ORDER IN ASSESSEE'S OWN CASE FOR THE ASST YEAR 2006-07 HELD THAT THE GROUND OF APPEAL ON THE CLAIM OF INDUSTRIAL PROMOTION ASSISTANCE (IPA) OF THE ASSESSEE BEING FILED FIRST TIME IS ACCEPTED. HE ALSO ACCEPTED THE PLEA OF THE ASSESSEE THAT THE IPA WOULD TANTAMOUNT TO CAPITAL RECEIPT AS THE SAME WAS GRANTED FOR EXPANSION OF AN EXISTING UNIT UNDER THE WEST BENGAL INCENTIVE SCHEME 2000 BY PLACING RELIANCE ON THE DECISION OF THE HON'BLE CALCUTTA HIGH COURT IN THE CASE OF CIT VSRASOI LTD REPORTED IN (2011) 335 ITR 438 (CAL) . HOWEVER, HE FURTHER HELD THAT THE SAID IPA WOULD GO TO REDUCE THE COST OF ASSETS IN T ERMS OF EXPLANATION 10 TO SECTION 43(1) OF THE ACT AND DEPRECIATION TO BE CLAIMED ON THE REDUCED COST OF ASSETS THEREON. AGGRIEVED, BOTH THE ASSESSEE AS WELL AS THE REVENUE ARE IN APPEAL BEFORE US. 4.3. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSE D THE MATERIALS AVAILABLE ON RECORD INCLUDING THE PAPER BOOK CONTAINING THE ENTIRE WEST BENGAL INCENTIVE SCHEME 2000 AND ELIGIBILITY CERTIFICATE ISSUED BY THE COMPETENT AUT HORITY APPROVING THE EXPANSION OF EXISTING UNIT THEREBY APPROVING THE FACT OF ASSESSE E FALLING UNDER THE CATEGORY OF 'MEGA UNIT' UNDER THE SAID SCHEME. WE FIND THAT SUBSIDY C OULD BE REDUCED FROM THE COST ONLY IF IT IS FOUND THAT THE COST FOR ACQUIRING THE ASSET W AS DIRECTLY OR INDIRECTLY MET OUT OF THE SUBSIDY. IN ORDER TO APPLY THE PROVISO, IT IS NECES SARY TO SHOW THAT THE SUBSIDY HAD BEEN DIRECTLY OR INDIRECTLY USED TO ACQUIRE THE ASSET TH OUGH IT MAY NOT BE POSSIBLE TO EXACTLY QUANTIFY THE AMOUNT DIRECTLY OR INDIRECTLY USED FOR ACQUIRING THE ASSET. FOR THE PURPOSE OF APPLYING THE PROVISO, ALSO IT HAS TO BE FOUND THAT THE ASSET WAS ACQUIRED BY DIRECTLY OR INDIRECTLY USING THE SUBSIDY. IT IS APPARENT FROM T HE PROVISIONS OF THE 2000 SCHEME AND THE CERTIFICATE OF REGISTRATION AND ELIGIBILITY CER TIFICATE THAT THE ASSISTANCE WAS TO BE MADE ITA NO.AVAILABLE AFTER THE COMMENCEMENT OF COM MERCIAL PRODUCTION WITHOUT ANY FINANCIAL CAP AND WAS TO BE ADJUSTED AGAINST THE SA LES TAX LIABILITY OF THE YEAR OF CLAIM. THE INDUSTRIAL PROMOTION ASSISTANCE WAS CLEARLY NOT USED DIRECTLY OR INDIRECTLY TO ACQUIRE THE ASSETS NOR ANY PART OF THE COST OF THE ASSETS W AS MET DIRECTLY OR INDIRECTLY FROM THE INDUSTRIAL PROMOTION ASSISTANCE. WE FIND THAT THE I SSUE UNDER DISPUTE IS SQUARELY COVERED BY THE DECISION OF THIS TRIBUNAL IN ASSESSEE'S OWN CASE FOR ASST YEAR 2007-08 IN ITA NO. 683 & 581 /KOL/2011 DATED 8.12.2014 WHEREIN THE GRO UNDS RAISED BY THE ASSESSEE AS WELL AS BY THE REVENUE WERE AS UNDER:- ASSESSEE GROUND NO. 1 THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, TH E LEARNED CIT(APPEALS) THOUGH HOLDING THAT SALES-TAX INCENTIVE OF RS 1238000 ALLO WED BY THE STATE GOVT. IS THE NATURE OF CAPITAL RECEIPT BUT ERRED IN DIRECTING THE ASSES SING OFFICER (AO) FOR REDUCING THE SAME FROM THE COST OF FIXED ASSETS FOR THE PURPOSE OF CO MPUTING DEPRECIATION BY APPLYING THE EXPLANATION 10 TO SEC. 43(1) OF I. T. ACT. 12 ITA NO.2520/KOL/2018 SOVAISPAT LIMITED,AY- 2010-11 REVENUE GROUND NO. 1 THAT LD.CIT(A)-VI KOLKATA HAS ERRED IN LAW AS WELL AS ON FACTS BY DELETING THE ADDITION MADE BY THE AO ON ACCOUNT OF SALES TAX SUBISIDY REC EIVED BY THE ASSESSEE AS REVENUE INCOME OF RS 12,38,000/-. THE DECISION RENDERED THEREON BY THIS TRIBUNAL IS A S UNDER:- 7. WE HAVE HEARD RIVAL CONTENTIONS ON THIS ISSUE AN D GONE THROUGH THE FACTS AND CIRCUMSTANCES OF THE CASE. WE FIND THAT THE FACTS A RE DISCUSSED IN DETAIL AND WHICH ARE UNDISPUTED. IT IS ADMITTED THAT THE ASSESSEE'S ISSU E OF SALES TAX INCENTIVE IS CAPITAL IN NATURE FOR THE REASON THAT THE VERY SCHEME UNDER WH ICH THE EXPANSION OF THE UNIT AND SUBSIDY UNDER RAJASTHAN SALES TAX SCHEME, 1998 WAS RECEIVED EXPLAINS THE PURPOSE OF THE SCHEME AS INCURRING CAPITAL EXPENDITURE FOR INS TALLATION OF PLANT AND MACHINERY AND FOR ELIGIBLE FOR FIXED CAPITAL INVESTMENT. EVEN THE ISSUE OF ASSESSEE IS COVERED IN ITS FAVOUR BY TRIBUNAL'S DECISION IN ASSESSEE'S OWN CAS E ALL ALONG FROM A YS 2002-03 TO 2006-07. IT IS NOT BROUGHT TO OUR NOTICE BY THE REV ENUE THAT THE MATTER HAS BEEN DECIDED BY HON'BLE CALCUTTA HIGH COURT, DESPITE A QUERY FRO M THE BENCH, IN SUCH CIRCUMSTANCES, AND TAKING A CONSISTENT VIEW, WE HOLD THAT THE CIT( A) HAS RIGHTLY TREATED THE SALES TAX SUBSIDY RECEIPT AS 'CAPITAL IN NATURE' . 8. IN RESPECT TO THE ISSUE OF APPLICATION OF EXPLAN ATION-10 TO SEC.43(1) OF THE ACT WE FIND FROM THE FACTS OF THE CASE THAT THE RAJASTHAN GOVT. HAS FRAMED A INCENTIVE SCHEME I.E., R.S.T/C.S.T. EXEMPTIONS SCHEME 1998 FOR ENCOU RAGEMENT OF SETTING UP OF INDUSTRIAL PROJECT OR EXPANSION OF EXISTING INDUSTR IAL PROJECTS. IT IS ALSO A FACT THAT THE MAXIMUM LIMIT OF THE SUBSIDY WAS RESTRICTED WITH RE FERENCE TO THE VALUE OF FIXED CAPITAL INVESTMENT IN LAND, BUILDING, PLANT & MACHINERY BUT NO PART OF THE SUBSIDIARY WAS SPECIFICALLY INTENDED TO SUBSIDIZE THE COST OF THE ANY FIXED ASSETS, THEREFORE, IT CANNOT BE SAID THAT SUBSIDY WAS TO MEET A PORTION OF COST OF ASSET. ACCORDING TO US, ASSESSEE HAS RIGHTLY NOT REDUCED THE AMOUNT OF SUBSIDY RECEIVED FROM THE ACTUAL COST/WDV OF THE FIXED ASSETS WHILE CLAIMING DEPRECIATION. IT IS ALS O A FACT THAT REVENUE DURING SCRUTINY ASSESSMENTS OF THE ASSESSEE FOR AY S 2002-03 TO 200 6-07 ADDED THE SUBSIDY AMOUNT AS REVENUE RECEIPT BUT TRIBUNAL HAS CONSIDERED THE REC EIPT AS 'CAPITAL', ACCEPTING THE CONTENTION OF THE ASSESSEE. EVEN HON'BLE SUPREME CO URT IN THE CASE OF PJ. CHEMICALS. LTD. (SUPRA) HAS CONSIDERED THIS ISSUE AND HELD THA T WHERE GOVERNMENT SUBSIDY IS INTENDED AS AN INCENTIVE TO ENCOURAGE ENTREPRENEURS TO MOVE TO BACKWARD AREAS AND ESTABLISH INDUSTRIES, THE SPECIFIED PERCENTAGE OF T HE FIXED CAPITAL COST, WHICH IS THE BASIS FOR DETERMINING THE SUBSIDY, BEING ONLY A MEASURE A DOPTED UNDER THE SCHEME TO QUANTIFY THE FINANCIAL AID, IS NOT A PAYMENT, DIRECTLY OR IN DIRECTLY, TO MEET ANY PORTION OF THE ACTUAL COST. THEREFORE, THE SAID AMOUNT OF SUBSIDY CANNOT BE DEDUCTED FROM THE ACTUAL COST UNDER SEC. 43(1) FOR THE PURPOSE ALLOWING DEPR ECIATION. IT IS FURTHER HELD THAT IF GOVERNMENT SUBSIDY IS AN INCENTIVE NOT FOR THE SPEC IFIC PURPOSE OF MEETING A PORTION OF THE COST OF THE ASSETS, THOUGH QUANTIFIED AS A PERC ENTAGE OF SUCH COST, IT DOES NOT PARTAKE THE CHARACTER OF PAYMENT INTENDED EITHER DIRECTLY O R INDIRECTLY TO MEET THE 'ACTUAL COST'. BY IMPLICATION, THE ABOVE JUDGMENT ALSO PROVIDES TH AT IF THE SUBSIDY IS INTENDED FOR MEETING A PORTION OF THE COST OF THE ASSETS, THEN S UCH SUBSIDY SHOULD BE DEDUCTED FROM THE ACTUAL COST, FOR THE PURPOSE OF COMPUTING DEPRE CIATION. AS PER HON'BLE SUPREME COURT, LAW IS THAT IF THE SUBSIDY IS ASSET-SPECIFIC , SUCH SUBSIDY GOES TO REDUCE THE ACTUAL COST. IF THE SUBSIDY IS TO ENCOURAGE SETTING UP OF THE INDUSTRY, IT DOES NOT GO TO REDUCE THE ACTUAL COST, EVEN THOUGH THE AMOUNT OF SUBSIDY WAS QUANTIFIED ON THE BASIS OF THE 13 ITA NO.2520/KOL/2018 SOVAISPAT LIMITED,AY- 2010-11 PERCENTAGE OF THE TOTAL INVESTMENT MADE BY THE ASSE SSEE. THE LAW IS ALREADY SETTLED ON THE SUBJECT. NOW, THE ONLY WAVERING IS WITH REFEREN CE TO EXPLANATION 10 PROVIDED UNDER SEC.43(L) OF THE ACT. THE SAID EXPLANATION PROVIDES THAT WHERE A PORTION OF THE COST OF AN ASSET ACQUIRED BY THE ASSESSEE HAS BEEN MET DIRECTL Y OR INDIRECTLY BY THE CENTRAL GOVERNMENT OR A STATE GOVERNMENT OR ANY AUTHORITY E STABLISHED UNDER ANY LAW OR BY ANY OTHER PERSON, IN THE FORM OF A SUBSIDY OR GRANT OR REIMBURSEMENT (BY WHATEVER NAME CALLED), THEN, SO MUCH OF THE COST AS IS RELATABLE TO SUCH SUBSIDY OR GRANT OR REIMBURSEMENT SHALL NOT BE INCLUDED IN THE ACTUAL C OST OF THE ASSET TO THE ASSESSEE. IT IS FURTHER, PROVIDED THEREUNDER, THAT WHERE SUCH SUBSI DY OR GRANT OR REIMBURSEMENT OF SUCH NATURE THAT IT 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 SO RECEIVED, SHALL NOT BE INCLU DED IN THE ACTUAL COST OF THE ASSET TO THE ASSESSEE. IN ORDER TO INVOKE EXPLANATION 10, IT IS NECESSARY TO SHOW THAT THE SUBSIDY WAS DIRECTLY OR INDIRECTLY USED FOR ACQUIRING AN AS SET. THIS IS AGAIN A QUESTION OF FACT. THE RELATABLE SUBSIDY TO SUCH ASSET CAN BE REDUCED FROM THE COST ONLY IF IT IS FOUND THAT THE COST FOR ACQUIRING THAT ASSET WAS DIRECTLY OR I NDIRECTLY MET OUT OF THE SUBSIDY. LIKEWISE IN THE PROVISO, IT IS NECESSARY TO SHOW TH AT THE SUBSIDY HAS BEENDIRECTLY OR INDIRECTLY USED TO ACQUIRE AN ASSET BUT IT IS NOT P OSSIBLE TO EXACTLY QUANTIFY THE AMOUNT DIRECTLY OR INDIRECTLY USED FOR ACQUIRING THE ASSET . HERE ALSO, A FINDING OF FACT IS NECESSARY THAT AN ASSET WAS ACQUIRED BY DIRECTLY OR INDIRECTLY USING THE SUBSIDY. THE ABOVE EXPLANATION AND THE PROVISO THERETO DO NOT DI LUTE THE FINDING OF THE HON'BLE SUPREME COURT IN THE CASE OF P. J. CHEMICALS LTD.(S UPRA) THAT ASSET-WISE SUBSIDY ALONE CAN BE REDUCED FROM THE ACTUAL COST. THE ABOVE EXPL ANATION AND THE PROVISO THEREIN TO EXPLAIN THE LAW. THEY ARE NOT BRINGING ANY NEW LAW DIFFERENT FROM THE LAW CONSIDERED BY HON'BLE SUPREME COURT IN THE ABOVE CASES. 9. IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES OF THE CASE AND LEGAL POSITION EXPLAINED BY HON'BLE SUPREME COURT IN THE CASE OF P.J. CHEMIC ALS LTD. (SUPRA), WE ARE OF THE VIE THAT SUBSIDY RECEIPT SHOULD NOT BE REDUCED FROM THE ACTUAL COST OF FIXED ASSETS FOR COMPUTING DEPRECIATION UNDER THE PROVISIONS OF THE ACT. ACCORDINGLY, THIS ISSUE OF REVENUE'S APPEAL IS DISMISSED AND THAT OF THE ASSES SEE IS ALLOWED'. RESPECTFULLY FOLLOWING THE AFORESAID DECISION OF TH IS TRIBUNAL SUPRA , WE HOLD THAT THE IPA RECEIVED BY THE ASSESSEE WOULD HAVE TO BE CONST RUED AS A CAPITAL RECEIPT AND THE SAME NEED NOT BE REDUCED FROM THE COST OF ASSETS IN TERMS OF EXPLANATION 10 TO SECTION 43(1) OF THE ACT. ACCORDINGLY, THE GROUNDS RAISED B Y THE REVENUE ARE DISMISSED AND GROUNDS RAISED BY THE ASSESSEE ARE ALLOWED. 11. WE NOTE THAT SIMILAR ISSUE CAME UP BEFORE THIS TRIBUNAL IN THE CASES OF M/S. SHYAM STEEL INDUSTRIES LTD (SUPRA), M/S. BUDGE BUDGE REFI NERIES LTD (SUPRA), WHEREIN ALSO THE ISSUE WAS THE SAME IN NATURE AND THE TRIBUNAL WAS A DJUDICATING THE ISSUE AS TO WHETHER THE ASSESSEE RECEIVED IPA (INDUSTRIAL PROMOTION ASSISTA NCE) FROM THE WEST BENGAL GOVERNMENT PURSUANT TO THE WEST BENGAL INDUSTRIAL PROMOTION AS SISTANCE SCHEME 2000 RECEIVED IPA (INDUSTRIAL PROMOTION ASSISTANCE) FROM WEST BENGAL INCENTIVE SCHEME 2000 IS A CAPITAL 14 ITA NO.2520/KOL/2018 SOVAISPAT LIMITED,AY- 2010-11 NATURE OR NOT AND THE TRIBUNAL AFTER ANALYZING THE SCHEME 2000 HELD AS CAPITAL IN NATURE. THEREFORE, WE RESPECTFULLY DECIDES TO FOLLOW THE OR DERS OF THE TRIBUNAL IN THE AFORESAID CASES AS WELL AS KEEPING THE RATIO DECIDENDI OF THE HONB LE CALCUTTA HIGH COURT IN THE CASE OF RASOI LIMITED (SUPRA), THOUGH IT PERTAINED TO THE WEST BENGAL INDUSTRIAL PROMOTION SCHEME 1994 (WBIPS-1994). 12. WE NOTE THAT THE GOVT. OF WEST BENGAL HAS DECID ED TO GRANT THE SUBSIDY BY WAY OF IPA FOR SETTING UP OF LARGE/MEDIUM/SMALL SCALE ELIG IBLE UNIT WHICH IS PRESCRIBED IN THE WBIS 2000 AND THE UNIT HAS TO BE SET UP IN EITHER GROUP B OR C AREAS PRESCRIBED IN THE SAID SCHEME (WBIS 2000). WE NOTE THAT THE ASSESSEE HAD SET UP A NEW UNIT IN THE BANKURA DISTRICT OF WEST BENGAL AREA WHICH FALLS IN THE GRO UP C AREA OF THE SCHEME WBIS 2000. THE COMPETENT AUTHORITY OF THE STATE GOVERNMENT HAS APPROVED THE PACKAGE OF INCENTIVE FOR THE ASSESSEE VIDE LETTER DATED 24.09.2003 (SUPRA) F OR SETTING UP OF THE UNIT FOR MANUFACTURING OF SPONGE IRON, ROLLED PRODUCTS, FERRO ALLOYS ETC. IN THE STATE OF WEST BENGAL AT BANKURA DISTRICT TO SET UP THE UNIT WITH AN INVESTMENT OF R S.279 CR. THUS, WE NOTE THAT THE SUBSIDY/FINANCIAL ASSISTANCE WAS FOR PROMOTION OF T HE INDUSTRY AND FOR SETTING UP OF LARGE/MEDIUM/SMALL SCALE ELIGIBLE UNIT IN THE PLACE S PRESCRIBED AT GROUP B AND C IN THE SCHEME WBIS 2000. SINCE THE ASSESSEE FULFILLS THE ELIGIBILITY CONDITIONS PRESCRIBED BY THE SCHEME 2000 IT WAS ENTITLED TO INDUSTRIAL PROMOTION ASSISTANCE EQUIVALENT UP TO @75% OF THE SALES TAX PAID IN PREVIOUS YEAR WHICH SALES OF FINISHED GOODS SUBJECT TO A MAXIMUM OF 100% OF THE FIXED CAPITAL INVESTMENT FOR A MAXIMUM PERIOD OF 15 YEARS. ACCORDINGLY, THE ASSESSEE IN THE YEAR UNDER CONSIDERATION HAS RECEIV ED AN AMOUNT OF RS.1,96,77,000/- FROM THE WEST BENGAL UNDER THE WBIS 200 SCHEME. SINCE T HE OBJECT OF THE FINANCIAL ASSISTANCE AS PER THE SUBSIDY SCHEME WAS TO BE ENABLE THE ASSE SSEE TO SET UP A NEW UNIT IN THE AREAS AS SPECIFIED GROUP B OR C AS THE WBIS 2000, WE ARE OF THE OPINION THAT THE SUBSIDY WAS ON CAPITAL ACCOUNT. THE AO ERRED IN RELYING ON THE DE CISION OF THE HONBLE SUPREME COURT IN SAHANEY STEEL (SUPRA) WHEREIN THE FACTS WERE DIFFER ENT AND DISTINGUISHABLE. IN THAT CASE (SAHANEY STEEL) THE TRIBUNAL HAD DISALLOWED THE CLA IM OF THE ASSESSEE AND THE HONBLE SUPREME COURT IN SAHANEY STEELS CASE AFTER ANALYSI S OF THE SCHEME THEREIN HELD THAT THE SUBSIDY GIVEN WAS ON REVENUE ACCOUNT BECAUSE IT WA S GIVEN BY WAY OF ASSISTANCE IN CARRYING ON OF TRADE OR BUSINESS. ON THE FACTS OF THAT CASE, IT WAS HELD THAT THE SUBSIDY GIVEN 15 ITA NO.2520/KOL/2018 SOVAISPAT LIMITED,AY- 2010-11 WAS TO MEET RECURRING EXPENSES AND IT WAS NOT FOR A CQUIRING THE CAPITAL ASSET OR BRINGING INTO EXISTENCE ANY NEW ASSET AND CONSEQUENTLY THE CONTEN TION RAISED ON BEHALF OF THE ASSESSEE ON THE FACTS OF THAT CASE STOOD REJECTED AND IT WAS HE LD THAT THE SUBSIDY RECEIVED BY SAHANEY STEEL COULD NOT BE REGARDED AS ANYTHING BUT A REVEN UE RECEIPT AND THE APEX COURT WAS PLEASED TO CONFIRM THE TRIBUNALS ACTION. HOWEVER, THE CASE IN HAND BEFORE US IS DIFFERENT AS DISCUSSED ABOVE. THE OBJECT OF THE SUBSIDY IN THIS CASE IN WAS FOR SETTING UP OF UNIT IN GROUP B OR C AREAS AS SPELLED OUT IN THE WBIS SCHEME 2000 AND SINCE THE OBJECT OF THE ASSISTANCE UNDER THE SUBSIDY SCHEME WAS TO ENABLE THE ASSESSEE TO SET UP UNIT, THE RECEIPT OF SUBSIDY WAS ON CAPITAL ACCOUNT. WE NOTE THAT THE HONBLE S UPREME COURT IN THE SUBSEQUENT DECISION AFTER CONSIDERING THE SAHANEY STEEL & PRESS WORKS P VT. LTD. (SUPRA) IN THE CASE OF CIT VS. PONY SUGARS & CHEMICALS LTD. (SUPRA) HAS MADE IT C LEAR THAT FOR DETERMINING THE NATURE OF THE INCENTIVE/ SUBSIDY, THE OBJECT FOR WHICH THE SU BSIDY/ASSISTANCE GIVEN WILL BE THE DECIDING FACTOR AND THE FORM OR THE METHOD OF THE P AYMENT THROUGH WHICH THE SUBSIDY IS GIVEN IS IRRELEVANT. MERELY BECAUSE THE AMOUNT OF SUBSIDY WAS EQUIVALENT TO 75% OF THE SALES TAX PAID BY THE BENEFICIARY DOES NOT IMPLY TH AT THE SAME WAS IN THE FORM OF REFUND OF SALES TAX PAID. THEREFORE, SINCE THE SUBSIDY WAS F OR SETTING UP OF LARGE/MEDIUM/SMALL SCALE ELIGIBLE UNIT IN GROUP B AND C AREAS IN THE STATE O F WEST BENGAL AND THE COMPETENT AUTHORITY HAS ISSUED THE ELIGIBILITY CERTIFICATE (WEST BENGAL INDUSTRIAL DEVELOPMENT CORPORATION LTD.) TO THE ASSESSEE AND SINCE THE ASSESSEE FULFILLS ALL THE CONDITIONS AS LAID IN THE WBIS 2000 SCHEME, THE INDUSTRIAL PROMOTION ASSISTANCE IT RECE IVED WAS ON CAPITAL ACCOUNT. 13. IN THE LIGHT OF THE DISCUSSION ABOVE AND RELYI NG ON THE RATIO LAID IN THE DECISION OF THE HONBLE CALCUTTA HIGH COURT IN M/S. RASOI LTD. (201 1) 79 CCH 419, WE UPHOLD THE ORDER OF THE LD. CIT(A) SINCE THE SUBSIDY/IPA WAS GIVEN TO T HE ASSESSEE FOR SETTING UP OF MEGA PROJECT/UNIT IN THE DISTRICT OF BANKURA, WEST BENGA L ( AS DISCUSSED SUPRA). THEREFORE, WE FIND NO INFIRMITY IN THE IMPUGNED ORDER OF THE LD. CIT(A ). WE UPHOLD THE SAME. 14. BEFORE PARTING, IT IS NOTED THAT THE ORDER IS B EING PRONOUNCED AFTER NINETY (90) DAYS OF HEARING. HOWEVER, TAKING NOTE OF THE EXTRAORDINA RY SITUATION IN THE LIGHT OF THE COVID-19 PANDEMIC AND LOCKDOWN, THE PERIOD OF LOCKDOWN DAYS NEED TO BE EXCLUDED. FOR COMING TO SUCH A CONCLUSION, WE RELY UPON THE DECISION OF THE CO-ORDINATE BENCH OF THE MUMBAI 16 ITA NO.2520/KOL/2018 SOVAISPAT LIMITED,AY- 2010-11 TRIBUNAL IN THE CASE OF DCIT VS. JSW LIMITED IN ITA NO. 6264/MUM/2018 & 6103/MUM/2018, ASSESSMENT YEAR 2013-14, ORDER DT. 1 4 TH MAY, 2020. IN THE LIGHT OF THE ABOVE DISCUSSION, THE APPEAL OF REVENUE IS DISMISSE D. 15. IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED. ORDER IS PRONOUNCED IN THE OPEN COURT ON 29TH M AY, 2020. SD/- SD/- (P. M. JAGTAP) (ABY. T. VARKEY) VICE PRESIDENT JUDICIALMEMBER DATED :29TH MAY, 2020 JD.(SR.P.S.) COPY OF THE ORDER FORWARDED TO: 1. APPELLANT DCIT, CIRCLE-3(1), KOLKATA. 2 RESPONDENT M/S. SOVA ISPAT LIMITED, EN-32, SHYAM TOWERS, SECTOR-V, SALT LAKE CITY, KOLKATA-700 091. 3. 4. 5. CIT(A)-17, KOLKATA (SENT THROUGH E-MAIL) CIT- , KOLKATA. DR, ITAT, KOLKATA. (SENT THROUGH E-MAIL) BY ORDER, / TRUE COPY, ASSISTANT REGISTRAR ITAT, KOLKATA.