DCIT-CENTRAL-CIRCLE-1(4), Nagpur V. M/S ECONOMIC EXPLOSIVE LTD, Nagpur

ITA 314/NAG/2014

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 1609 (ITAT-NAGPUR)
• Duration Of Justice: 1 year(s) 5 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-11-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2007-2008
• Appeal Filed On: 18-06-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NARENDRA KANE
• Assessee Lawyers: VASANTI R PATEL
• Keywords: Business income; Capital receipt; Benefit of exemption; Revised return; Capital expenditure
• Section: 143(3)

Judgement Text

1 ITA NO.314/NAG/2014 IN THE INCOME TAX APPELLATE TRIBUNAL: NAGPUR BENCH: NAGPUR BEFORE SHRI MUKUL K. SHRAWAT, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER. I.T.A. NO.314/NAG/2014 ASSESSMENT YEAR: 2007 - 08 THE DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 1(4), NAGPUR VS M/S. ECONOMIC EXPLOSIVE LTD., 11, ZADE LAYOUT, BHARAT NAGAR, NAGPUR, PAN: AAACE3871C (APPELLANT) (RESPONDENT) APPELLANT BY SHRE NARENDRA KANE, DR RESPONDENT BY MS. VASANTI R. PATEL, AR DATE OF HEARING: 22 - 09 - 2015 DATE OF PRONOUNCEMENT: 24 - 11 - 2015 O R D E R PER MUKUL K. SHRAWAT, J.M. THIS IS AN APPEAL FILED BY THE REVENUE EMANATING FROM THE ORDER OF THE LEARNED CIT (A) - I, NAGPUR DATED 07 - 03 - 2014. THE SUBSTANTIVE GROUND RAISED BY THE REVENUE IS REPRODUCED BELOW: - 1) ON THE FACTS AN D IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, WHETHER THE LD. CIT (A) HAS ERRED IN DIRECTING TO DELETE THE ADDITION OF RS.97,47,804/ - TOWARDS SALES TAX INCENTIVE SCHEME, WITHOUT APPRECIATING THE FACT THAT AS PER THE SCHEME, THE ASSESSEE NEED NOT COLLECT A ND PAY ANY SALES TAX DURING THE SPECIFIED PERIOD, AND ALLOWING DEDUCTION TOWARDS NOTIONAL TAX LIABILITY TANTAMOUNT TO WRONG DEDUCTION? 2. FACTS IN BRIEF, AS EMERGED FROM THE CORRESPONDING ASSESSMENT ORDER PASSED U/S 143(3) OF THE IT ACT DATED 06 - 07 - 2009 W ERE THAT THE ASSESSEE IS A DOMESTIC COMPANY AND ENGAGED IN THE BUSINESS OF MANUFACTURING OF DETONATORS, FUSE ETC. A RETURN OF INCOME WAS FILED DECLARING TOTAL INCOME OF 2 ITA NO.314/NAG/2014 RS.5,52,04,240/ - . SUBSEQUENTLY, THE RETURN WAS REVISED AND CLAIM OF EXEMPTION FOR RS.97 ,47,804/ - WAS MADE. IN COMPLIANCE OF THE QUERY OF THE AO, AN EXPLANATION WAS OFFERED BY THE ASSESSEE AS UNDER: - OUR COMPANY HAS GOT SALES TAX INCENTIVES UNDER PSI 1993 OF GOVERNMENT OF MAHARASHTRA. AS PER SCHEME WE ESTABLISH PLANT AT BACKWARD DISTRICT THE N WE ARE ELIGIBLE TO AVAIL SALES TAX EXEMPTION IN PROPORTION OF INVESTMENT MADE IN CAPITAL EXPENDITURE. THESE SALES TAX INCENTIVES ARE NOT REPAYABLE BY THE ASSESSEE BUT REPRESENT THE INCENTIVES PROVIDED BY GOVERNMENT OF MAHARASHTRA WITH RELATION TO COST OF PROJECT. THOUGH WE HAVE NOT CHANGED SALES TAX SEPARATELY IN OUR SALES INVOICES. THE TAX COMPONENT OF RS.97,47,803/ - WAS INCLUDED IN SALES PRICED. WE HAVE AVAILED BENEFITS OF RS.97,47,803/ - BY WAY OF SALES TAX EXEMPTION. THE SAID AMOUNT SHOULD NOT BE TREA TED AS REVENUE INCOME. THE SAME VIEW HAS BEEN TAKEN IN THE CASE OF RELIANCE INDUSTRIES LV. V/S DY. CIT BY THE LARGER BENCH OF ITAT MUMBAI, 88 ITD 273. WE REQUEST YOU KINDLY TREAT RS.97,47,804/ - AS CAPITAL RECEIPT. 3. HOWEVER, THE AO WAS NOT CONVINCED AND THE REASONS GIVEN FOR REJECTION OF THE EXEMPTION WERE AS UNDER: - I) THE ASSESSEE IS A COMPANY DERIVING INCOME FROM MANUFACTURING DETONATORS. FUSES HEADS, FILLED SHELLS NONEL SHOCK TUBE AND WIND MILL POWER. IN THE INCOME COMPUTATION STATEMENT OF THE REVISE D RETURN, A SUM OF RS.97,47,804/ - WAS DEDUCTED AS SALES TAX (EXEMPTION COMPONENT). II) THE SALE PRICE OF DETONATOR WAS RS.6,63,19,106/ - . ON THE SALE VALUE, THE SALES TAX SUBSIDY WAS WORKED OUT @ 12.5%. THIS COMES TO RS.82,89,888/ - . THE SALES SUPPORTED BY F ORM C OR D WAS RS.3,64,47,897/ - . ON THIS VALUE SALES TAX SUBSIDY WAS WORKED OUT @4%. THIS COMES TO RS.14,57,916/ - . THE TOTAL SALES TAX SUBSIDY CLAIMED COMES TO RS.97,47,804/ - . PERUSAL OF THE SALE BILL RAISED BY THE ASSESSEE THE ASSESSEE REVEALS THAT THE AS SESSEE DID NOT CHARGE ANY AMOUNT UNDER THE HEAD SALES TAX. IN THE INVOICES PREPARED & ISSUED TO THE PURCHASERS, THE COLUMN UNDER ST/CST/VAT WAS WRITTEN AS NIL. THE ASSESSEE DID NOT MAINTAIN ANY SEPARATE SALES TAX ACCOUNT / INCENTIVE ACCOUNT NOR HAS SHOWN A NY AMOUNT 3 ITA NO.314/NAG/2014 OUTSTANDING LIABILITY UNDER THE HEAD. ASSESSEE FURNISHED THE XEROX COPIES OF SALES TAX RETURN GIVEN TO THE SALES TAX AUTHORITY IN SUPPORT OF THEIR CLAIM. THE ASSESSEE ALSO FURNISHED THE CERTIFICATE OF THE ENTITLEMENT ISSUED BY THE DY. COMMISSIONE R OF SALES TAX, NAGPUR AND DIC, NAGPUR. III) UNDER THE SCHEME ASSESSEE WAS NOT REQUIRED TO PAY ANY SALES TAX TO THE GOVERNMENT DURING THE SPECIFIED PERIOD. IV) THE TURNOVER WAS EXEMPT FROM THE LEVY OF SALES TAX FOR A SPECIFIED PERIOD. IT IS NOT DEFERMENT BUT COMPLETE EXEMPTION FROM PAYMENT OF SALES TAX. V) THE NOTIONAL TAX LIABILITY @12.5% & 4% CANNOT BE DEDUCT ED FROM THE PROFIT SIMPLY BECAUSE THE ASSESSEE IS ENTITLED FOR AVAILING OF SALES INCENTIVE UNDER THE SCHEME. OTHERWISE, IT AMOUNTS TO DOUBLE DEDUCT ION I.E. NO SALES TAX PAYMENT TO THE STATE GOVERNMENT DURING THE SPECIFIED PERIOD AND REDUCTION OF EQUIVALENT AMOUNT FROM THE PROFIT OFFERED FOR INCOME TAX. VI) THERE WAS NO CLAIM OF SALES TAX SUBSIDY FOR EARLIER ASSESSMENT YEARS THOUGH THE ASSESSEE IS EN TITLED FROM 01 - 07 - 1998. VII) THE ASSESSEE RELIES ON THE DECISION OF RELIANCE INDUSTRIES LTD. REPORTED AT 88 ITD 273 (MUM.) (SB). WITH DUE RESPECT TO THE ITAT DECISION OF MUMBAI BENCH, MUMBAI, IT HAS NOT BECOME FINAL. SINCE, THE SALES TAX INCENTIVE OF RS.9 7,47,804/ - WAS DISALLOWED BY THE AO , HENCE, AN APPEAL WAS PREFERRED BY THE ASSESSEE. BEFORE THE LEARNED CIT(A), FACTS WERE REITERATED AND FEW CASE LAWS WERE CITED AND THERE UPON RELIEF WAS GRANTED BY THE LEARN ED CIT(A) IN THE FOLLOWING MANNER: - 6.7 THE HO NBLE ITAT, SPECIAL BENCH, MUMBAI, IN THE CASE OF RELIANCE INDUSTRIES LTD. H AS CONSIDERED THE QUESTION AS REGARDS TO WHETHER SUBSIDY RECEIVED ON ACCOUNT OF EXEMPTION FROM SALES TAX WOULD BE TREATED AS CAPITAL OR REVENUE IN NATURE . THE FACTS OF THE PRESENT CASE OF THE APPELLANT ARE SQUARELY APPLICABLE TO THE CASE OF RELIANCE INDUSTRIES LTD., WHEREIN THE HONBLE MUMBAI SPECIAL BENCH OF TRIBUNAL AFTER CONSIDERING THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF SAHNEY STEEL & PRESS WORKS LTD. H AS HELD THAT THE ASSESSEE COMPANY IS JUSTIFIED IN ITS CLAIM THAT THE SALES TAX INCENTIVE ALLOWED TO IT DURING THE PREVIOUS YEAR IN TERMS OF THE RELEVANT GOVERNMENT ORDER CONSTITUTED CAPITAL RECEIPT AND WAS NOT TO BE TAKEN INTO ACCOUNT IN COMPUTATION OF 4 ITA NO.314/NAG/2014 TOTAL INCOM E. ON FURTHER APPEAL, THE BOMBAY HIGH COURT, AFTER CONSIDERING THE DECISION OF THE SPECIAL BENCH OF THE TRIBUNAL AND THE TEST AS LAID DOWN BY THE HONBLE SUPREME COURT IN CIT VS PONNI SUGARS AND CHEMICALS LTD. (306) ITR 392 HAS HELD THAT THE OBJECT OF THE SUBSIDY WAS TO SET UP A NEW UNIT IN A BACKWARD AREA TO GENERATE EMPLOYMENT, THEREFORE, THE SUBSIDY IS CLEARLY ON CAPITAL ACCOUNT. THE AO HAS DECLINED TO ACCEPT THE DECISION OF THE SPECIAL BENCH, MUMBAI, IN THE CASE OF RELIANCE INDUSTRIES LTD. ON THE GROUND THAT THE ISSUE HAS NOT YET BEEN FINALISED. THE AR OF THE APPELLANT IN THIS REGARD HAS PLACED RELIANCE ON SEVERAL DECISIONS OF HIGH COURTS AND SUPREME COURT, INCLUDING THE JURISDICTIONAL MUMBAI HIGH COURT, AND CONTENDED THAT AO CANNOT REACH TO THE CONCLUS ION WHEN THE ISSUE BEFORE HIM IS SUB - JUDICED BEFORE THE HIGHER AUTHORITY/COURT. THERE IS SUBSTANTIAL FORCE IN THE CONTENTIONS OF THE APPELLANT THEREFORE; I DECLINE TO AGREE WITH THE VERSION OF THE AO. THE LD. AO OUGHT TO HAVE CONSIDERED THE DECISION OF THE SPECIAL BENCH OF ITAT, MUMBAI, IN THE CASE OF RELIANCE INDUSTRIES LTD. ON THE IDENTICAL FACTS. THUS, TAKING INTO CONSIDERATION THE JUDICIAL DECISIONS RELIED UPON BY THE AR, I AM OF THE CONSIDERED OPINION THAT THE CLAIM OF THE APPELLANT FOR EXEMPTION OF S UBSIDY AS CAPITAL IN NATURE IS ALLOWABLE. THEREFORE, THE ADDITION MADE BY THE AO IS DIRECTED TO BE DELETED . 4 . FROM THE SIDE OF THE REVENUE , THE LEARNED DR, MR. NARENDRA KANE APPEARED AND SUPPORTED THE ACTION OF THE AO MAINLY ON THE GROUND THAT THE ASSE SSEE WAS N OT REQUIRED TO PAY ANY SALES TAX ALTHOUGH CALCULATED AS PER THE SALES TAX BILLS, HENCE, IT WAS IN THE NATURE OF SALES COLLECTION, THEREFORE, NOT TO BE CLAIMED AS EXEMPTED AMOUNT. THE LEARNED DR HAS ALSO PLEADED THAT AS PER THE OBSERVATION OF THE AO THE ASSESSEE WAS NOT MAINTAINING A SEPARATE INVOICE OR ACCOUNT IN RESPECT OF THE CLAIM OF INCENTIVES AND SALES TAX COLLECTED. IN THE ABSENCE OF ANY SALES TAX SUBSIDY ACCOUNT, IT WAS NOT POSSIBLE TO ASCERTAIN WHETHER ANY INCENTIVE WAS GIVEN TO THE ASSESS EE. AS REGARDS, THE ENTIRE SALES, ALONG WITH COLLECTION OF SALES TAX WERE NOTHING BUT REVENUE RECEIPTS TO BE TAXED IN THE HANDS OF THE ASSESSEE. THE LEARNED DR HAS, THEREFORE, PLEADED THAT THE ACTION OF THE AO DESERVES TO BE AFFIRMED. 5 ITA NO.314/NAG/2014 5 . F ROM THE SIDE OF THE RESPONDENT ASSESSEE, THE LEARNED AR, MRS. VASANTI B. PATEL APPEARED AND SUPPORTED THE RELIEF GRANTED BY THE LEARNED CIT (A). SHE HAS EXPLAINED THAT - 1. THE GOVERNMENT OF MAHARASHTRA, INDUSTRIES, ENERGY AND LABOUR DEPARTMENT, VIDE RESOLUTION NO. IDL - 10 93/(8889)/IND - 8, MANTRALAYA, BOMBAY 400 032, DATED MAY 7, 1993 HAS INTRODUCED PACKAGE SCHEME OF INCENTIVES, 1993 (THE 1993 SCHEME OR THE SCHEME). PRIOR TO THIS THE GOVERNMENT HAD INTRODUCED ALMOST SIMILAR PACKAGE SCHEME OF INCENTIVE IN 1964, WHICH WAS AMENDED FROM TIME TO TIME AND THE LAST IT WAS AMENDED IN 1988. THE LAST SUCH SCHEME WAS KNOWN AS 1988 SCHEME AND WAS OPERATIVE FROM OCTOBER 1, 1988 TO SEPTEMBER 30, 1993. 2. PURSUANT TO THE 1993 SCHEME, THE APPELLANT HAS SET UP NEW INDUSTRIAL UNIT IN NOTIF IED BACKWARD AREA LOCATED AT SAWANGA, POST SHIVA, TALUKA AND DISTRICT NAGPUR (ELIGIBLE UNIT) FOR MANUFACTURE OF DETONATORS, FUSE HEADS, FILLED SHELLS, NONEL SHOCK TUBE WITH THE INITIAL FIXED CAPITAL INVESTMENT OF RS.283.01 LAKHS. 3. SUBSEQUENTLY, THE APP ELLANT HAS MADE AN APPLICATION FOR ITS ELIGIBLE UNIT UNDER THE 1993 SCHEME FOR ISSUE OF ELIGIBILITY CERTIFICATE IN ORDER TO AVAIL BENEFIT OF EXEMPTION FROM PAYMENT OF SALES TAX FOR A PERIOD OF 10 YEARS. AFTER EXAMINATION OF THE FULFILMENT OF THE VARIOUS CO NDITIONS UNDER THE 1993 SCHEME, THE APPELLANT WAS ISSUED ELIGIBILITY CERTIFICATE BY THE DISTRICT INDUSTRIES CENTRE, NAGPUR, BEING IMPLEMENTING AGENCY NOTIFIED UNDER THE 1993 SCHEME FOR IMPLEMENTING THE SAID SCHEME. PURSUANT TO SUCH ELIGIBILITY CERTIFICATE THE APPELLANT HAS COMMENCED PRODUCTION. DURING THE YEAR UNDER CONSIDERATION, THE APPELLANT HAS COLLECTED SALES TAX BY WAY OF ADDITION TO THE SALE PRICE OF THE PRODUCTS MANUFACTURED AND SOLD BY IT. HOWEVER, WHILE RAISING INVOICE FOR SALES, 6 ITA NO.314/NAG/2014 SALES TAX WAS NOT REFLECTED SEPARATELY. THUS, THE SAID AMOUNT OF SALES TAX COLLECTED FORMED PART OF THE SALES WHICH WAS CREDITED TO PROFIT AND LOSS ACCOUNT FOR THE YEAR UNDER CONSIDERATION. AS A RESULT, THE SALES TAX COLLECTED FORMED PART AND PARCEL OF THE NET PROFIT WHI CH HAS BEEN CONSIDERED BY THE APPELLANT AS THE STARTING POINT FOR COMPUTATION OF INCOME FOR THE CAPTIONED ASSESSMENT YEAR. THUS, THE APPELLANT HAS TREATED THE SALES TAX COLLECTED AS ITEM OF REVENUE IN ITS BOOKS OF ACCOUNTS AS ALSO IN THE ORIGINAL RETURN OF INCOME FILED BY IT. HOWEVER, IN THE REVISED RETURN OF INCOME THE APPELLANT HAS CLAIMED THE SALES TAX COLLECTED AS CAPITAL RECEIPT NOT LIABLE TO TAX UNDER THE ACT. A RELIANCE WAS PLACED ON THE DECISION OF THE ITAT MUMBAI SPECIAL BENCH IN THE CASE OF CIT V S RELIANCE INDUSTRIES LTD. , 88 ITD 273, SAHNEY STEELS, 228 ITR 253, CIT VS PONNI SUGARS AND CHEMICALS, 306 ITR 392 (SC), CIT VS RUBY RUBBER WORKS LTD. , 178 ITR 181 [KER.], CIT VS PJ CHEMICALS , 201 ITR 830 (SC) ETC. 6 . WE HAVE HEARD BOTH THE SIDES AT SOM E LENGTH AND CAREFULLY PERUSED THE MATERIALS BEFORE US IN THE LIGHT OF THE EVIDENCES FILED AND THE PRECEDENCE CITED. ALTHOUGH, THE ISSUE IN HAND IS NOW DISCUSSED AT LENGTH BY VARIOUS HONBLE COURTS AND THE LEGAL POINTS NOW STOOD SETTLED BUT, IT IS ALWAYS ADVISABLE TO COMPARE THE FACTS OF THE PRESENT CASE WITH THE FACTS OF THE PRECEDENCE CITED. IN THIS REGARD, OUR ATTENTION HAS BEEN DRAWN ON A CHART PLACED BEFORE THE LEARNED CIT (A) COMPARING THE FACTS OF THE CITED DECISION OF RELIANCE INDUSTRIES LTD. AND THE FACTS OF THE APPELLANT. THIS COMPARISON IS AN IMPORTANT EXERCISE; HENCE, IT IS WORTH TO MAKE IT A PART OF OUR JUDGMENT. HENCE, THE SAME IS REPRODUCED BELOW: - 7 ITA NO.314/NAG/2014 SR. NO. RELIANCE INDUSTRIES LIMITEDS CASE (SUPRA .) APPELLANTS CASE 1 THE SCHEME FRAMED B Y THE GOVERNMENT OF MAHARASHTRA IN 1979 GOVERNMENT OF MAHARASHTRA IN 1993 AND IT IS REVISION OF THE EARLIER SCHEMES INCLUDING THE 1979 SCHEME. 2 OBJECT OF THE SCHEME: THE OBJECT OF THE SCHEME WAS INDUSTRIAL DEVELOPMENT OF BACKWARD DISTRICT AS WELL AS GENE RATION OF EMPLOYMENT. THE OBJECT OF THE SCHEME WAS INDUSTRIAL DEVELOPMENT OF BACKWARD DISTRICT AS WELL AS GENERATION OF EMPLOYMENT, AS THIS AS EXTENSION OF EARLIER SCHEMES VIZ. SCHEMES INTRODUCED IN 1964, 1979 AND 1988 3 INDUSTRIAL UNDERTAKING: THE ASSES SEE IN THIS CASE HAS SET UP INDUSTRIAL UNDERTAKING IN NOTIFIED BACKWARD AREA VIZ. PATALGANGA, RAIGAD DISTRICT. THE APPELLANT HAS SET UP INDUSTRIAL UNDERTAKING IN NOTIFIED BACKWARD AREA VIZ. SAWANGA, POST SHIVA, TALUKA AND DISTRICT NAGPUR. 4 NATURE OF INCE NTIVE UNDER THE SCHEME: EXEMPTION FROM LIABILITY OF PAYMENT OF SALES TAX FOR A PERIOD OF FIVE YEARS. EXEMPTION FROM LIABILITY OF PAYMENT OF SALES TAX FOR A PERIOD OF TEN YEARS. 5 MODE OF QUANTIFICATION OF SUBSIDY: THE QUANTIFICATION WAS BASED ON CERTAIN P ERCENTAGE OF INVESTMENT IN FIXED CAPITAL IN THE NATURE OF VARIOUS SPECIFIED ASSETS. THE QUANTIFICATION IS BASED ON CERTAIN PERCENTAGE OF INVESTMENT IN FIXED CAPITAL IN THE NATURE OF VARIOUS SPECIFIED ASSETS. 6 MODE OF PAYMENT OF SUBSIDY: THE ASSESSEE WA S ENTITLED TO COLLECT THE SALES TAX IN THE NATURE OF SUBSIDY AND RETAIN THE SAME WITHOUT MAKING PAYMENT FOR THE SAME. THE APPELLANT IS ENTITLED TO COLLECT THE SALES TAX IN THE NATURE OF SUBSIDY AND RETAIN THE SAME WITHOUT MAKING PAYMENT FOR THE SAME. 7 T IME OF RECEIPT OF SUBSIDY: THE ASSESSEE WAS ENTITLED TO RECEIVE SUBSIDY AFTER THE MANUFACTURE AND SALE OF PRODUCT I.E. SALES TAX COULD NOT BE COLLECTED BEFORE THE MONTH OF PRODUCTION AND ITS SALE/ THE ASSESSEE WAS ENTITLED TO RECEIVE SU9BSIDY AFTER THE MA NUFACTURE AND SALE OF PRODUCT I.E. SALES TAX COULD NOT BE COLLECTED BEFORE THE MONTH OF PRODUCTION AND ITS SALE. 8 ITA NO.314/NAG/2014 THEREFORE, FROM THE FACTS OF THE CASE, IT IS EVIDENT THAT THE ASSES SEE HAD SET UP A UNIT AT SAWANGA DISTRICT, NAGPUR, A NOTIFIED BACKWARD A REA. AN INVESTMENT IN THE INITIAL FIXED CAPITAL WAS MADE AT RS.283.01 LACS. AN APPLICATION WAS MADE TO THE DISTRICT INDUSTRIES CENTRE FOR ISSUE OF ELIGIBILITY CERTIFICATE FOR EXEMPTION FROM PAYMENT OF SALES TAX UNDER 1990 SCHEME. THE APPELLANT WAS GRANTED THE ELIGIBILITY CERTIFICATE ON 09 - 06 - 2000. AS PER THE SAID ELIGIBILITY CERTIFICATE; THE ASSESSEE WAS ENTITLED FOR EXEMPTION FROM PAYMENT OF SALES TAX UP TO RS.254.70 LACS FOR A PERIOD OF TEN YEARS FROM 15 TH JULY, 2000 TO 14 TH JULY, 2010. LATER ON, FURTHER INVESTMENT WAS ENHANCED AND ACCORDINGLY RENEWED ELIGIBILITY CERTIFICATE WAS GRANTED. WE HAVE ALSO CONSIDERED THE OBJECT OF 1993 SCHEME AND THE MAIN FEATURE WAS TO GRANT INCENTIVE TO THE INDUSTRIES ESTABLISHED IN THE BACKWARD AREAS FOR DEVELOPMENT OF UNDER - DEVELOPED REGION OF MAHARASTRA STATE. WE HAVE ALSO EXAMINED THE LEGAL ASPECT WHETHER THE SUBSIDY IN QUESTION IS CAPITAL IN NATURE OR REVENUE IN NATURE. AFTER GOING THROUGH THE DECISIONS CITED BEFORE US AND FEW OF THEM ALREADY DISCUSSED BY THE LEARNED CIT ( A), WE ARE OF THE CONSIDERED OPINION THAT THE ISSUE IS SQUARELY COVERED BY THOSE DECISIONS ESPECIALLY BY THE DECISION OF RELIANCE INDUSTRIES LTD., 88 ITD 273 (SB) (MUM.). KEEPING BREVITY I N MIND, WE ARE NOT DISCUSSING ALL THE DECISION DELIVERED ON THIS ISS UE ALTHOUGH DISCUSSED DURING THE COURSE OF HEARING. UNDER THE TOTALITY OF THE FACTS AND CIRCUMSTANCES OF THE CASE AND THE LAW ALREADY PRONOUNCED, WE ARE OF THE CONSIDERED OPINION THAT THE ASSESSEE COMPANY WAS JUSTIFIED IN CLAIMING THE SALES TAX INCENTIVES AS EXEMPT AND NOT TO BE TAKEN INTO ACCOUNT IN COMPUTING THE TAXABLE INCOME. THE VIEW TAKEN BY THE LEARNED CIT (A) IS ACCORDINGLY CONFIRMED. THE GROUND OF APPEAL RAISED BY THE REVENUE IS DISMISSED. 9 ITA NO.314/NAG/2014 7 . IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 24 TH DAY OF NOVEMBER, 2015. SD/ - SD/ - (SHAMIM YAHYA) (MUKUL K. SHRAWAT) ACCOUNTANT MEMBER JUDICIAL MEMBER NAGPUR , DATED: 24 TH NOV., 2015. LAKSHMIKANT DEKA/SR. PS COPY FORWARDED TO : 1. APPELLANT 2. RESPONDENT 3. C.I.T., CONCERNED 4. CIT (APPEALS) - I, NAGPUR. 5. D.R., ITAT, NAGPUR. 6. GUARD FILE TRUE COPY BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, NAGPUR BENCH, NAGPUR. DATE INITIAL ORIGINAL DICTATION PAD & DRAFT ARE EN CLOSED IN THE FILE 1. DRAFT DICTATED ON 17.11.2015 SR.PS 2. DRAFT PLACED BEFORE AUTHOR 18.11.2015 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/AM 5. APPROVED DRAFT COMES TO TH E SR.PS/PS SR.PS 6. DATE OF PRONOUNCEMENT SR.PS 7. FILE SENT TO THE BENCH CLERK SR.PS