Addl.Commissioner of Income-tax,Ranage-6, Nagpur V. M/s. Corporate Ispat Alloys Limited,Nagpur, Nagpur

ITA 64/NAG/2011

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 1930 (ITAT-NAGPUR)
• Duration Of Justice: 1 year(s) 9 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-01-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2007-2008
• Appeal Filed On: 29-03-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: H WANARE
• Keywords: Capital receipt

Judgement Text

, - IN THE INCOME TAX APPELLATE TRIBUNAL NAGPUR , BENCH , ( E - COURT), MUMBAI , BEFORE SHRI R.K.GUPTA , J M & SHRI RAJENDRA , A M ITA NO. 64 / N AG / 20 1 1 ( ASSESSMENT YEAR : 200 7 - 0 8 ) ACIT, RANGE - 6, NAGPUR (MAHARASHTRA) VS. M/S CORPORATE ISPAT ALLOYS LTD., F - 8 MIDC INDUSTRIAL AREA, NAGPUR (MAHARASHTRA) PAN/GIR NO. : A AAC C 8109 R ( APPELLANT ) .. ( RESPONDENT ) /REVENUE BY : MR. H.WANARE /ASSESSEE BY : MR. K.P.DEWANI DATE OF HEARING : 1 8 TH DEC ., 2012 DATE OF PRONOUNCEMENT : 2 ND JAN . ,201 3 O R D E R P ER SHRI R.K.G UPTA, JM : TH E DEPARTMENT HAS PREFERRED THIS APPEAL BEFORE THE ITAT NAGPUR BENCH, NAGPUR, AGAINST THE ORDER OF LEANED CIT (A) - I I , NAGPUR (MAHARASHTRA) , WHICH HAS BEEN HEARD THROUGH E - COURT, MUMBA I . 2 . THE DEPARTMENT IN ITS APPEAL RAISES OBJECTION IN REGARD TO DIRECTING THE AO TO TREAT THE SALES TAX INCENTIVES AMOUNTING TO RS. 2,03,70,420/ - AS CAPITAL IN NATURE AND THEREBY DELETING THE ADDITION. ITA NO . 64 /20 1 1 2 3 . DURING THE ASSESSMENT PROCEEDING, THE AO NOTICED T HAT AN AMOUNT OF RS. 2,03,70,420/ - HAS BEEN REDUCED FROM THE P & L ACCOUNT TREATING THE SAME AS CAPITAL RECEIPT. THIS BEING REMISSION ON SALE TAX LIABILITY WAS CONSIDERED AS CAPITAL RECEIPT BY THE ASSESSEE. THE AO HAS HELD THAT FROM THE PERUSAL OF THE INCE NTIVE SCHEME OF THE WEST BENGAL GOVERNMENT UNDER WHICH THE REMISSION OF SALES TAX HAS BEEN RECEIVED, IT IS CLEAR THAT THE PAYMENT OF SALES TAX INCENTIVE IS RELATED TO THE PRODUCTION ACTIVITY OF THE ASSESSEE TO ENHANCE THE SUPPLY OF PROFIT EARNED. THEREFORE , THIS SUBSIDY IS REVENUE IN NATURE AND IS TO BE BROUGHT TO TAX BY ADDING THE SAME TO THE INCOME OF THE ASSESSEE. 4 . BEING AGGRIEVED WITH THE ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LEARNED CIT(A) . IT WAS SUBMITTED BEFORE THE CIT(A) THAT SIMILAR DISALLOWANCE WAS MADE FOR THE ASSESSMENT YEAR S 2003 - 04, 2005 - 06 & 2006 - 07. LEARNED CIT(A) ALLOWED THE APPEALS OF THE ASSESSEE BY APPROVING THE SAME AS CAPITAL RECEIPT OF THESE YEARS. FURTHER THE TRIBUNAL FOR TH E ASSESSMENT YEAR 2005 - 06 IN ITA85/NAG/2009 VIDE ITS ORDER DATED 10 - 6 - 2009, HAS CONFIRMED THE ORDER OF LEARNED CIT(A) . FOLLOWING THE DECISION OF THE TRIBUNAL, LEARNED CIT(A) ALLOWED THE ISSUE IN FAVOUR OF THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION. 5 . AGGRIEVED THEREBY, THE DEPMARTMENT IS IN APPEAL HERE BEFORE THE TRIBUNAL. 6 . LEARNED DR PLACED RELIANCE ON THE ORDER OF AO. ITA NO . 64 /20 1 1 3 7. ON THE OTHER HAND, LEARNED AR OF THE ASSESSEE PLACED RELIANCE ON THE ORDER OF THE LEARNED CIT(A) . FURTHER THE ORDER OF THE TRIBU NAL FOR THE ASSESSMENT Y EAR 2006 - 07 IN CASE OF ASSESSEE ITSELF WAS ALSO FILED WHEREBY THE ISSUE WAS ALSO DECIDED IN FAVOUR OF THE ASSESSEE. 8 . AFTER CONSIDERING THE ORDER OF THE AO AND THE CIT(A) , WE FOUND NO INFIRMITY IN THE ORDER OF LEARNED CIT(A ) FOR THE SIMPLE REASON THAT LEARNED CIT(A) HAS ALLOWED THE APPEAL OF THE ASSESSEE FOLLOWING THE ORDER OF THE TRIBUNAL FOR THE ASSESSMENT YEAR 2005 - 06 ON SIMILAR FACTS. THE TRIBUNAL FOR ASSESSMENT YEAR 2006 - 07 ALSO AFTER DISCUSSING THE ISSUE IN DETAIL HAS CONF IRMED THE ORDER OF LEARNED CIT(A) WHILE DECIDING THE APPEAL NO. 179/NAG/2009, DATED 28 - 4 - 2011. COPY OF THE ORDER IS PLACED ON RECORD. IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES OF THE CASE, WE CONFIRM THE ORDER OF THE LEARNED CIT(A) FOR THE YEAR UNDER CON SIDERATION. 9 . IN THE RESULT , APPEAL OF THE DEPARTMENT IS DISMISSED . ORDER PRONOUNCED IN THE E - COURT ON THIS 2ND DAY OF JAN . 201 3 . - 201 3 SD/ - SD/ - ( ) ( RAJENDRA ) ( ) ( R.K.GUPTA ) / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI ; DATED : 02 / 01 / 201 3 . /PKM , PS COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / THE CIT(A) , MUMBAI / NAGPUR . ITA NO . 64 /20 1 1 4 4. / CIT 5. / DR, ITAT, MUMBAI / NAGPUR . 6. GU ARD FILE. //TRUE COPY// / BY ORDER, ( DY./ASSTT. REGISTRAR) / ITAT, MUMBAI