M/S JINDAL PHOTO LTD.,NEW DELHI V. ACIT, NEW DELHI

ITA 5451/DEL/2016

AI Insights

The case involves multiple appeals by M/s Jindal Photo Ltd against the orders of the Commissioner of Income Tax (Appeals) pertaining to different assessment years from 2006-07 to 2014-15. The primary issue in these appeals was the claim by the assessee for exclusion of sales tax subsidy from its taxable income, arguing that such subsidies are capital receipts. The Income Tax Department contested this, treating the subsidies as revenue receipts. The Tribunal examined the nature of the subsidies, the legal provisions under which the claims were made, and the procedural aspects of how these claims were presented during the assessment proceedings under section 153A of the Income Tax Act, following a search operation on the assessee's premises.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 361203 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-05-2025
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Assessment Year: 2013-2014
• Other Referred Cases: Goetze (India) Ltd. vs. CIT, Sahney Steel & Press Works Ltd vs. CIT, PCIT vs. Abhisar Buildwell (P.) Ltd, CIT vs. Mahindra Mills, Wipro Finance Ltd. vs. CIT, National Thermal Power Limited vs. CIT, CIT vs. Simon Carves Ltd., CIT vs. Mahalaxmi Sugar Mills Co. Ltd, Anchor Pressings (P) Ltd. vs. CIT and Ors, Chicago Pneumatic India Ltd. vs. DCIT, Emerson Net Work Power India (P) Ltd. vs. ACIT, Asian Paints Ltd. vs. ACIT
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: BALJEET KAUR
• Assessee Lawyers: ROHIT JAIN
• Keywords: Set aside; Business income; Capital asset; Revised return; Question of law; Capital receipt; Capital expenditure; Search and seizure
• Section: 147; 148; 143(3); 32; 132; 153A; 139; 10B; 139(5)

Judgement Text

"ITA No. 5251 to 5257/DEL/2015 [A.Y 2006-07 to A.Y 2012-13] ITA No. 5451/DEL/2016 [A.Y 2013-14]; ITA No. 4492/DEL/2017 [A.Y 2014-15] M/s Jindal Photo LtdVs.The A.C.I.T Page 1 of 63 IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI ‘E’ BENCH, NEW DELHI BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER AND SHRI NAVEEN CHANDRA, ACCOUNTANT MEMBER ITA No. 5251/DEL/2015 [A.Y 2006-07] ITA No. 5252/DEL/2015 [A.Y 2007-08] ITA No. 5253/DEL/2015 [A.Y 2008-09] ITA No. 5254/DEL/2015 [A.Y 2009-10] ITA No. 5255/DEL/2015 [A.Y 2010-11] ITA No. 5256/DEL/2015 [A.Y 2011-12] ITA No. 5257/DEL/2015 [A.Y 2012-13] ITA No. 5451/DEL/2016 [A.Y 2013-14] ITA No. 4492/DEL/2017 [A.Y 2014-15] M/s Jindal Photo Ltd Vs. The A.C.I.T 11/5B, Pusa Road, Basement 1 Central Circle-30 Opp. Telephone Exchange New Delhi New Delhi PAN - AACCC 3508 Q (Applicant) (Respondent) Assessee By : Shri Rohit Jain, Adv Shri Tavish Verma, Adv Ms. Deepashree Rao, Adv Department By : Ms. Baljeet Kaur, CIT-DR Date of Hearing : 21.02.2025 Date of Pronouncement : 21.05.2025 ITA No. 5251 to 5257/DEL/2015 [A.Y 2006-07 to A.Y 2012-13] ITA No. 5451/DEL/2016 [A.Y 2013-14]; ITA No. 4492/DEL/2017 [A.Y 2014-15] M/s Jindal Photo LtdVs.The A.C.I.T Page 2 of 63 ORDER PER BENCH :- This is a bunch of nine separate appeals by same assessee preferred against separate orders of the ld. CIT(A) pertaining to different Assessment Years 2006-07 to A.Y 2014-15. 2. Since the underlying facts are common in all the appeals of the assessee and pertain to same assessee, they were heard together and are disposed of by this common order for the sake of convenience and brevity. 3. The facts of the case in brief is that the assessee is a company engaged in the business of manufacturing and trading of photo sensitized goods. There was a search on the assessee on 14.11.2011. The common issue raised in the present appeals relate to the claim of non-taxability of sales tax subsidy/incentive from the purview of taxable income. ITA No. 5251 to 5257/DEL/2015 [A.Y 2006-07 to A.Y 2012-13] ITA No. 5451/DEL/2016 [A.Y 2013-14]; ITA No. 4492/DEL/2017 [A.Y 2014-15] M/s Jindal Photo LtdVs.The A.C.I.T Page 3 of 63 3.1 The above nine appeals may be categorized into three groups i.e., AY 2006-07, 2007-08 and 2008-09 in 1st group; AY 2009-10, 2010- 11 and 2011-12 in 2nd group and 2012-13, 2013-14 and 2014-15 in the 3rd group. We will address each group of appeals one by one. 3.2 The 1st category is of cases of completed/unabated assessment years.For these years, the assessee has not made the claim for exclusion of sales tax subsidy from taxable income, in either original or in revised ROI. The assessee also did not claim the sales tax subsidy as non-taxable in the return filed u/s 153A. The claim for exclusion of sales tax subsidy from taxable income is made by way of revised computation of income during the proceedings u/s 153A. 3.3 The 2nd category is of cases of abated assessment years. For these years, the assessee has not made the claim for exclusion of sales tax subsidy from taxable income, in either original or in revised ROI. The assessee also did not claim the sales tax subsidy as non- taxable in the return filed u/s 153A. The claim for exclusion of sales tax subsidy from taxable income is made by way of revised computation of income during the proceedings u/s 153A. ITA No. 5251 to 5257/DEL/2015 [A.Y 2006-07 to A.Y 2012-13] ITA No. 5451/DEL/2016 [A.Y 2013-14]; ITA No. 4492/DEL/2017 [A.Y 2014-15] M/s Jindal Photo LtdVs.The A.C.I.T Page 4 of 63 3.4 The 3rd category is of cases where the assessee’s claim for exclusion of sales tax subsidy, has been made in the revised ROI u/s 153Ain AY 2012-13 and in original ROI for AY 2013-14 and AY 2014-15. ITA No. 5251/DEL/2015 [A.Y 2006-07] ITA No. 5252/DEL/2015 [A.Y 2007-08] ITA No. 5253/DEL/2015 [A.Y 2008-09] 4. The Grounds raised by the assessee in these three appeals for AY 2006-07, 2007-08 and 2008-09 are identical except for figures mentioned. For the sake of brevity, grounds of AY 2006-07 are read as under: “1. That the CIT(A) erred on facts and in law in not holding that the action of the assessing officer in not entertaining the appellant's claim for exclusion of sales tax subsidy/ incentives amounting to Rs. 17,91,14,076 received in respect of sales made in the Union Territory of Dadra & Nagar Haveli, from the taxable income, as the same constituted capital receipt not liable to tax under the provisions of the Income Tax Act, 1961 ('the Act'), was bad in law. 1.1 That the CIT(A) erred on facts and in law in holding that the above claim was not legally admissible on the ground that: a) the claim was made in proceedings initiated under section 153A pursuant to search carried out under section 132, which is for the benefit of the Revenue; ITA No. 5251 to 5257/DEL/2015 [A.Y 2006-07 to A.Y 2012-13] ITA No. 5451/DEL/2016 [A.Y 2013-14]; ITA No. 4492/DEL/2017 [A.Y 2014-15] M/s Jindal Photo LtdVs.The A.C.I.T Page 5 of 63 b) there was no incriminating material found during the search and hence closed assessment cannot be disturbed by initiating the proceedings under section 153A; and c) revised return under section 139(5) of the Act was not filed for making the claim. 2. That the CIT(A) erred on facts and in law in holding that the sales tax subsidy/ incentive received by the appellant under the Scheme was revenue receipt instead of capital receipt as contended by the appellant. The appellant craves leave to add to, alter, amend or vary from the aforesaid grounds of appeal at or before the time of hearing.” ITA No. 5254/DEL/2015 [A.Y 2009-10] ITA No. 5255/DEL/2015 [A.Y 2010-11] ITA No. 5256/DEL/2015 [A.Y 2011-12] 5. The Grounds raised by the assessee in these three appeals for AY 2009-10 to 2011-12 are identical except for figures mentioned. For the sake of brevity, grounds for AY 2009-10 are read as under: “1. That the CIT(A) erred on facts and in law in not holding that the action of the assessing officer in not entertaining the appellant's claim for exclusion of sales tax subsidy/ incentives amounting to Rs. 18,23,49,384/- received in respect of sales made in the Union Territory of Dadra & Nagar Haveli, from the taxable income, as the same constituted capital receipt not liable ITA No. 5251 to 5257/DEL/2015 [A.Y 2006-07 to A.Y 2012-13] ITA No. 5451/DEL/2016 [A.Y 2013-14]; ITA No. 4492/DEL/2017 [A.Y 2014-15] M/s Jindal Photo LtdVs.The A.C.I.T Page 6 of 63 to tax under the provisions of the Income Tax Act, 1961 ('the Act'), was bad in law. 1.1 That the CIT(A) erred on facts and in law in holding that the above claim was not legally admissible on the ground that: a) the claim was made in proceedings initiated under section 153A pursuant to search carried out under section 132, which is for the benefit of the Revenue; b) there was no incriminating material found during the search and hence closed assessment cannot be disturbed by initiating the proceedings under section 153A; and c) revised return under section 139(5) of the Act was not filed for making the claim. 1.2. Without prejudice, the CIT(A) erred on facts and in law in not allowing the above claim without appreciating that regular assessment proceedings for the captioned assessment year was abated pursuant to the search and there was only one assessment which was framed by the assessing officer under section 153A of the Act. 2. That the CIT(A) erred on facts and in law in holding that the sales tax subsidy/ incentive received by the appellant under the Scheme was revenue receipt instead of capital receipt as contended by the appellant. ITA No. 5251 to 5257/DEL/2015 [A.Y 2006-07 to A.Y 2012-13] ITA No. 5451/DEL/2016 [A.Y 2013-14]; ITA No. 4492/DEL/2017 [A.Y 2014-15] M/s Jindal Photo LtdVs.The A.C.I.T Page 7 of 63 The appellant craves leave to add to, alter, amend or vary from the aforesaid grounds of appeal at or before the time of hearing.” ITA No. 5257/DEL/2015 [A.Y 2012-13] ITA No. 5251/DEL/2016 [A.Y 2013-14] ITA No. 4492/DEL/2017 [A.Y 2014-15] 6. The Grounds raised by the assessee in these three appeals for AY 2012-13 to 2014-15are identical except for figures mentioned. For the sake of brevity, grounds for AY 2012-13 are read as under: 1. That the CIT(A) erred on facts and in law in not holding that the action of the assessing officer in not entertaining the appellant's claim for exclusion of sales tax subsidy/ incentives amounting to Rs. 26,87,35,340 received in respect of sales made in the Union Territory of Dadra & Nagar Haveli, from the taxable income, as the same constituted capital receipt not liable to tax under the provisions of the Income Tax Act, 1961 ('the Act'), was bad in law. 1.1 That the CIT(A) erred on facts and in law in holding that the sales tax subsidy/ incentive received by the appellant under the Scheme was revenue receipt instead of capital receipt as contended by the appellant. The appellant craves leave to add, alter, amend or vary from the aforesaid grounds of appeal at or before the time of hearing. ITA No. 5251 to 5257/DEL/2015 [A.Y 2006-07 to A.Y 2012-13] ITA No. 5451/DEL/2016 [A.Y 2013-14]; ITA No. 4492/DEL/2017 [A.Y 2014-15] M/s Jindal Photo LtdVs.The A.C.I.T Page 8 of 63 7. For the 1st category of cases, the relevant facts for assessment year(s) 2006-07 to 2008-09 is tabulated as under: Particulars AY 2006-07 AY 2007-08 AY 2008-09 Original Return of income (ROI) filed Rs.15,38,38,581 [ROI filed on 13.11.2006] Rs.23,31,26,599 [ROI filed on 10.03.2008] Rs.29,54,61,385 [ROI filed on 25.09.2008] Regular assessment proceedings u/s 143(3) of the Act pending Notice dtd. 23.03.2011 issued u/s 143(2) Asst. u/s 143(3) at Rs 15,62,29,979 on 22.12.2008 Time limit for issuance of notice u/s 143(2) expired. Time limit for issuance of notice u/s 143(2) expired. Reopened u/s 148 Notice dt. 18.01.2010 NA NA Assessment u/s 143(3)/147 Rs 26,01,59,915 dt. NA NA After appeal to HC Rs 15,62,29,979 NA NA Search and seizure operation u/s 132 of the Act in case of appellant 14.11.2011 [Return filed u/s 153A on 20.12.2012] ROI filed u/s 153A Rs 15,38,38,581 on 20.12.2012 Rs 23,31,26,599 on 20.12.2012 Rs 29,54,61,385 on 20.12.2012 Asst. u/s 153A Rs 15,62,29,979 dt 28.03.2014 Rs 23,51,08,517 on 27.03.2014 Rs 29,82,03,317 on 27.03.2014 Revised total income declared in computation of income filed before AO vide letter dtd 23.07.2013, claiming exclusion of sales tax subsidy/incentive Rs.6,08,51,188 Rs.10,16,74,128 Rs.16,91,24,741 Amount of sales tax incentive claimed as exclusion Rs.17,91,14,076 Rs.19,59,81,455 Rs.20,40,99,735 ITA No. 5251 to 5257/DEL/2015 [A.Y 2006-07 to A.Y 2012-13] ITA No. 5451/DEL/2016 [A.Y 2013-14]; ITA No. 4492/DEL/2017 [A.Y 2014-15] M/s Jindal Photo LtdVs.The A.C.I.T Page 9 of 63 8. For the 2nd category of cases, the relevant facts for assessment year(s) 2009-10 to 2011-12 is tabulated as under: Particulars AY 2009-10 AY 2010-11 AY 2011-12 Original Return of income (ROI) filed Rs.22,36,03,487 [ROI filed on 25.09.2009] Rs.16,30,95,797 [ROI filed on 18.09.2010] Rs.24,35,67,212 [ROI filed on 15.09.2011] Regular assessment proceedings u/s 143(3) of the Act pending Notice dtd. 23.03.2011 issued u/s 143(2) Notice dtd. 29.08.2011 issued u/s 143(2) Time limit for issuance of notice u/s 143(2) not yet expired. Search and seizure operation u/s 132 of the Act in case of appellant 14.11.2011 [Return filed u/s 153A on 20.12.2012] Revised total income declared in the computation of income filed before AO vide letter dtd 23.07.2013, claiming exclusion of sales tax subsidy/incentive Rs.5,08,57,276 Rs.58,43,371 Rs.5,95,54,355 Amount of sales tax incentive claimed as exclusion Rs.18,23,49,384 Rs.17,65,66,394 Rs.19,07,45,614 9. For the 3rd category of cases, the relevant facts for assessment year(s) 2012-13 to 2014-15 is tabulated as under: Particulars AY 2012-13 AY 2013-14 AY 2014-15 Original Return of Rs.24,33,88,700 (Rs.27,20,62,644) Rs.27,78,67,489 ITA No. 5251 to 5257/DEL/2015 [A.Y 2006-07 to A.Y 2012-13] ITA No. 5451/DEL/2016 [A.Y 2013-14]; ITA No. 4492/DEL/2017 [A.Y 2014-15] M/s Jindal Photo LtdVs.The A.C.I.T Page 10 of 63 income (ROI) filed [ROI filed on 24.09.2012] [ROI filed on 20.09.2013] [ROI filed on 19.09.2014] Return filed in response to notice u/s 153A dt 30.10.2012 Rs.24,33,88,700 [Assessee requested on 20.12.2012 to treat ROI filed on 24.09.2012 as return u/s 153A] Exclusion of sales tax subsidy from taxable income made in revised return of income Claim made in revised ROI filed on 24.09.2013 Claim made in original return of income only Amount of sales tax incentive claimed as exclusion Rs.26,87,35,340 Rs. 36,87,96,698 Rs.23,40,73,591 Regular assessment concluded u/s 143(3) of the Act 10. Briefly to get a bird’s eye view of the above 9 appeals for various AYs is that the claim of the assessee to exclude the sales tax subsidy granted to it by the State Government from its taxable income, for AYs 2006-07 to 2014-15,be allowed on account of the same being a capital receipt. 11. As mentioned above, there are three categories of claims in the above 9 appeals. The 1st category involving AY 2006-07 to 2008-09, are cases where the assessee in its original returns declared the sales tax subsidy as income. The assessee for these three years did not file any ITA No. 5251 to 5257/DEL/2015 [A.Y 2006-07 to A.Y 2012-13] ITA No. 5451/DEL/2016 [A.Y 2013-14]; ITA No. 4492/DEL/2017 [A.Y 2014-15] M/s Jindal Photo LtdVs.The A.C.I.T Page 11 of 63 revised return to claim the sales tax subsidy as non-taxable/capital receipts. The assessee also did not claim the sales tax subsidy as non- taxable in the return filed u/s 153A. It was only by way of revised computation of income, during the proceedings u/s 153A, the assessee claimed the sales tax subsidy as non-taxable. It is an undisputed fact that the above three AYs were completed/unabated assessment years. 12. The 2nd category involving AY 2009-10 to 2011-12, are also cases where the assessee in its original returns declared the sales tax subsidy as income. The assessee, for these three years did not file any revised return to claim the sales tax subsidy as non-taxable. The assessee also did not claim the sales tax subsidy as non-taxable in the return filed u/s 153A. It was only by way of revised computation of income, during the proceedings u/s 153A, the assessee claimed the sales tax subsidy as non-taxable.The above three years were pending assessment and therefore stood abated. 13. In impugned order(s) dated 28.03.2014 u/s 153Ain category 1st and 2nd, the aforesaid claim not made in original/revised ROI,was rejected by AO applying the ratio of Goetze (India) Ltd. vs. CIT ITA No. 5251 to 5257/DEL/2015 [A.Y 2006-07 to A.Y 2012-13] ITA No. 5451/DEL/2016 [A.Y 2013-14]; ITA No. 4492/DEL/2017 [A.Y 2014-15] M/s Jindal Photo LtdVs.The A.C.I.T Page 12 of 63 reported in 284 ITR 323(SC). The AO further held that fresh claim cannot be entertained in 153A proceedings. On appeal, the CIT(A), vide consolidated order dated 11.05.2015, upheld order of the AO on grounds that claims are not admissible in the light of the decision in Goetze (supra); and on merits held that sales tax subsidy received qualified as revenue receipt and hence taxable relying on, relying on Sahney Steel & Press Works Ltd vs. CIT in 228 ITR 253 (SC). 14. The 3rd category involving AY 2012-13, the assessee in its original return filed under section 139(1) dated 24.09.2012 did not claim any exemption for sales tax subsidy as capital receipt. The assessee also did not claim any exemption for sales tax subsidy as capital receipt in its return filed in response to notice u/s 153A dated 30.10.2012. The claim for exclusion of the sales tax subsidy as non-taxable was made for the first time by filing revised return u/s 139(5) for AY 2012-13 on 24.09.2013. 14.1 For AY 2012-13, being the search year, the assessment was completed as regular assessment u/s 143(3).In impugned order(s) dated 28.03.2014 for AY 2012-13, the claim for exclusion of the sales tax subsidy as non-taxable made in revised ROI u/s 139(5) for AY 2012- ITA No. 5251 to 5257/DEL/2015 [A.Y 2006-07 to A.Y 2012-13] ITA No. 5451/DEL/2016 [A.Y 2013-14]; ITA No. 4492/DEL/2017 [A.Y 2014-15] M/s Jindal Photo LtdVs.The A.C.I.T Page 13 of 63 13,was rejected by AO on the ground that the claim was neither made in the original return filed u/s 139(1) nor in return filed in response to the notice u/s 153A. The AO further held that the 153A proceedings are initiated only for the benefit of revenue. On appeal, CIT(A), vide consolidated order dated 11.05.2015, entertained claim made in the revised ROI but on merits held that sales tax subsidy received qualified as revenue receipt and hence taxable relying on Sahney Steel & Press Works Ltd vs. CIT reported in 228 ITR 253 (SC). 15. The 3rd category involving AY 2013-14 and AY 2014-15, the assessee in its original return filed under section 139(1) itself claimed the exemption for sales tax subsidy as capital receipt. The two years i.e.,AY 2013-14 and AY 2014-15, were completed as regular assessment u/s 143(3).In impugned order(s) dated29.01.2016 for AY 2013-14, and 29.12.2016 for AY 2014-15,the claim for exclusion of the sales tax subsidy as non-taxable being capital receipts, was rejected by AO on the ground that the same is revenue receipts. On appeal, CIT(A), vide orders dated 24.08.2016 for AY 2013-14 and 24.05.2017 for AY 2014-15, held that the assessee has not charged/collected any sales tax from the customers and therefore, sales tax is not included in the gross sales shown in the P&L account. The ld CIT(A) held that the assessee has not ITA No. 5251 to 5257/DEL/2015 [A.Y 2006-07 to A.Y 2012-13] ITA No. 5451/DEL/2016 [A.Y 2013-14]; ITA No. 4492/DEL/2017 [A.Y 2014-15] M/s Jindal Photo LtdVs.The A.C.I.T Page 14 of 63 received any subsidy from the sales tax department and therefore, claim of the assessee is not only imaginary/notional but false also. The Ld.CIT(A) also followed his predecessor’s decision in earlier assessment years, where it was held that the nature of sales tax subsidy qualified as revenue receipt and hence taxable relying on Sahney Steel & Press Works Ltd vs. CIT reported in 228 ITR 253 (SC). The ld CIT(A) however held that the nature of receipt is academic as the assessee has not included any sales tax in the gross sales and the income has not been increased on account of claim of such alleged notional subsidy. 15.1. Aggrieved, the assessee is in appeal before us. 16. Before us, the ld AR of the assessee, with regard to 1st category of cases, submitted that the action of the Assessing Officer is not based on judicious appreciation of facts and position of law. The ld AR however, without conceding, stated that in the 1st category of cases pertaining to the AYs 2006-07, 2007-08 and 2008-09are cases of completed/unabated assessment and in view of the decision of Supreme Court in the case of PCIT vs. Abhisar Buildwell (P.) Ltd: 454 ITR 212 (SC), stated that for the above three AYs, no assessment can be made in absence of any incriminating materials. ITA No. 5251 to 5257/DEL/2015 [A.Y 2006-07 to A.Y 2012-13] ITA No. 5451/DEL/2016 [A.Y 2013-14]; ITA No. 4492/DEL/2017 [A.Y 2014-15] M/s Jindal Photo LtdVs.The A.C.I.T Page 15 of 63 17. The ld AR of the assessee, with regard to 2nd and 3rd category of cases, put forward two broad contentions as follows: The aforesaid action of AO/CIT(A) is not sustainable in law for the following reasons: (a) On admissibility of claim - Legal claim in abated proceedings is admissible; (b) On Merits-Sales tax subsidy/incentive qualifies as capital receipt, not liable to tax. 18. With regard to admissibility of claim, the ld AR submitted that the reliance placed by AO/CIT(A) on decision of Goetz (supra) is highly misplaced since SC judgment was in context of power of AO to entertain a fresh claim made otherwise than by revised return. The Supreme Court, however, made it clear that the decision in Goetze India Limited (supra) was restricted to the power of Assessing Authority to entertain a claim for deduction otherwise than by a revised return and the same, did not impinge on the power of the Tribunal u/s 254 of the Act to permit a new claim. Further, the ld. counsel for the assessee submitted that the Supreme Court also held ITA No. 5251 to 5257/DEL/2015 [A.Y 2006-07 to A.Y 2012-13] ITA No. 5451/DEL/2016 [A.Y 2013-14]; ITA No. 4492/DEL/2017 [A.Y 2014-15] M/s Jindal Photo LtdVs.The A.C.I.T Page 16 of 63 that the decision in the case of National Thermal Power Company Ltd. v CIT: 229 ITR 383 dealing with powers of appellate authority to admit new claims did not relate to the power of the assessing authority to entertain a claim otherwise than by way of revised return. It is argued that in fact Supreme Court clarified that power of Tribunal u/s 254 of the Act to permit new claim was not impinged. 19. That apart, the ld. counsel for the assessee submitted, that the purpose of assessment is to compute the correct taxable income of the assessee as per the provisions of the Act and even if the deduction was not claimed in the return of income by the assessee, which was clearly allowable in law to the assessee, the assessing officer was duty bound to consider and allow such claim suo-motu, while framing the assessment and relied on the Circular No. 14 (XL-35) dated 11.04.1955 issued by the Board of Revenue under the Income-Tax Act, 1922. The ld AR relied on the following decisions, where Courts have held that the AO is duty bound to grant benefits and reliefs during assessment, even if not claimed in ROI. Reliance in this regard is placed on the following decisions: 1. CIT vs. Mahindra Mills: 243 ITR 56 (SC) 2. Wipro Finance Ltd. vs. CIT: 443 ITR 250 (SC) 3. National Thermal Power Limited vs. CIT: 229 ITR 383(SC) 4. CIT vs. Jai Parabolic Springs Ltd: 306 ITR 42 (Del) ITA No. 5251 to 5257/DEL/2015 [A.Y 2006-07 to A.Y 2012-13] ITA No. 5451/DEL/2016 [A.Y 2013-14]; ITA No. 4492/DEL/2017 [A.Y 2014-15] M/s Jindal Photo LtdVs.The A.C.I.T Page 17 of 63 5. CIT vs. Aspentech India 6. CIT vs. Simon Carves Ltd.: 105 ITR 212 (SC) 7. CIT vs. Mahalaxmi Sugar Mills Co. Lad: 160 ITR 920 (SC) 8. Anchor Pressings (P) Ltd. vs. CIT and Ors 161 ITR 159 (SC) 9. National Thermal Power Limited vs. CIT: 229 ITR 383(SC) 10. CIT vs. Bharat General Reinsurance: 81 ITR 303 (Del) 11. CIT vs. Hiranand: 148 Taxman 281 (Raj)P. Ltd.: ITA No. 1233 (Del) 20. The ld. counsel for the assessee relied upon the decision of the Hon'ble Supreme Court in the case of CIT vs. Mahindra Mills: 243 ITR 56, which approved the aforesaid Circular. Further reliance was placed on the following decisions: a) CIT vs. Geo Industries and Insecticides (1) Pvt Ltd: 234 ITR 541 (Mad) b) Wipro Ltd vs. DCIT: 96 TTJ 211 (Bang) ITO vs. Sadha Ram & Co: 153 Taxman 55 (Am) c) Chicago Pneumatic India Ltd. vs. DCIT 15 5ОТ 252 (2007) (Del) 21. The ld AR submitted that the Delhi High Court in the case of CIT vs. Jai Parabolic Springs Ltd: 306 ITR 42 has held that the Tribunal has the power to adjudicate a fresh claim raised for the very first time. 22. Further, the Delhi High Court in the case of CIT Vs Aspentech India P. Ltd.: ITA No. 1233/2011, allowed the clam of commission made by the assessee by way of revised computation filed before the assessing officer relying on NTPC (supra) and Jute Corporation (supra).To the same effect are the following decisions: ITA No. 5251 to 5257/DEL/2015 [A.Y 2006-07 to A.Y 2012-13] ITA No. 5451/DEL/2016 [A.Y 2013-14]; ITA No. 4492/DEL/2017 [A.Y 2014-15] M/s Jindal Photo LtdVs.The A.C.I.T Page 18 of 63 • CIT vs. Ramco International: 221 CTR 491 (P&H) • CIT vs. Hero Honda Finlease Lad: 115 TTJ 752 (Del TM) • SNC-Lavalin Acres Inc: 110 TTJ 13 (Del.) • Sirpur Paper Mills Ltd. vs. ACTT: ITA No. 425/Hyd/01 (Hyd) • Chicago Pneumatic India P. Ltd. vs. DCIT (2007) 15 SOT 252 (Mum) • Emerson Net Work Power India (P) Ltd. vs. ACIT 2009122 TTJ 67 (Mum Tri.) • Ogilvy and Mather (P) Ltd. vs. Addl. CIT: ITA No. 925/Mum/2009 (ITAT Mum) • DCIT vs. Tata Asset Management Ltd.: ITA No. 4665/Mum/2010 (ITAT Mum) • Asian Paints Ltd. vs. ACIT: ITA No. 5092/M/2007 (Mum) 23. On the issue of applicability of the decision of the Supreme Court in case of PCIT v. Wipro Ltd.: [2022] 446 ITR 1 (SC) on the facts of this case, the ld AR filed a submission stating that the same is distinguishable and submitted that in the Wipro Ltd case the Assessee was a 100% export-oriented unit and engaged in the business of running a call center and IT Enabled and Remote Processing Services. Assessee filed return of income on 31-10-2001 declaring loss of Rs. 15,47,76,990 and claimed exemption under section 10B of the IT Act and also annexed a note clarifying that the company is a 100% export-oriented unit and entitled to claim exemption under section 10B of the IT Act and therefore, no loss is being carried forward. 24. Pertinently, sub-section (8) of section 10B provides an option to the assessee to withdraw/opt out of claim of deduction by furnishing a ITA No. 5251 to 5257/DEL/2015 [A.Y 2006-07 to A.Y 2012-13] ITA No. 5451/DEL/2016 [A.Y 2013-14]; ITA No. 4492/DEL/2017 [A.Y 2014-15] M/s Jindal Photo LtdVs.The A.C.I.T Page 19 of 63 declaration in writing to the assessing officer before the due date for furnishing the return of income under section 139(1) of the Act. Contrary to the said statutory timeline/ mandate, the assessee filed a belated declaration dated 24-10-2002 before the Assessing Officer (AO) opting not to avail the benefit under section 10B vide revise return of income on 23-12-2002, which was beyond the due date prescribed in section 10B(8). 25. In the background facts, the apex Court held that in order to opt out of section 10B, the assessee is required to fulfil the twin conditions, namely, (i) furnishing a declaration to the assessing officer in writing that the provisions of section 10B(8) may not be made applicable to him, and (ii) the said declaration to be furnished before the due date of filing the return of income under sub-section (1) of section 139 of the IT Act. Therefore, since the said mandatory statutory conditions are not complied with, the Court held that the assessee cannot opt out of section 10B(8) and cannot claim benefit of carry forward of loss. 26. The ld AR submitted that in coming to the aforesaid conclusion, the Supreme Court, in fact, distinguished its decision in the case of CIT ITA No. 5251 to 5257/DEL/2015 [A.Y 2006-07 to A.Y 2012-13] ITA No. 5451/DEL/2016 [A.Y 2013-14]; ITA No. 4492/DEL/2017 [A.Y 2014-15] M/s Jindal Photo LtdVs.The A.C.I.T Page 20 of 63 V. G.M. Knitting Industries (P) Ltd: [2015] 376 ITR 456 (SC) wherein the Court held that deduction under section 32 and deduction under section 80IA can be claimed even though Form 10CCB was not filed with the return of income but was filed during the course of assessment. 27. To summarize, the ld AR stated that the aforesaid judgement has been rendered by the Supreme Court in the context of specific statutory timeline for withdrawal of claim as mandated under section 10B(8), which cannot be applied in other case, much less in the case like the present one where there is no specific statutory time limit for claiming non-taxability of subsidy incentive. 28. The ld AR is placed specific reliance upon the decision of the three Judge Bench of the Apex Court in the case of Wipro Finance Ltd. vs. CIT: [2022] 443 ITR 250 (SC) where the Supreme Court held that limitation, if any, imposed in Goetze (India) Ltd (supra) would apply to the \"assessing authority\", but not impinge upon the plenary powers of the ITAT bestowed under section 254 of the Act. ITA No. 5251 to 5257/DEL/2015 [A.Y 2006-07 to A.Y 2012-13] ITA No. 5451/DEL/2016 [A.Y 2013-14]; ITA No. 4492/DEL/2017 [A.Y 2014-15] M/s Jindal Photo LtdVs.The A.C.I.T Page 21 of 63 29. It is further submitted that the assessing officer was bound to consider the claim on merits for inter alia, the following reasons: a. First and foremost, the issue is relevant only for assessment years 2009-10 to 2012-13, since for assessment years 2013-14 and 2014-15, the AO considered the claim on merit; b. Secondly, for assessment years 2009-10 to 2011-12, the original regular assessment merged with the 153A proceedings and therefore, the scope of 153A assessment included the issues that could have been considered in regular 143(3) proceedings; c. Thirdly, for assessment year 2012-13, being the search year, the proceedings were, in fact, regular assessment proceedings and not regular assessment as merged with the 153A proceedings and therefore, AO ought to have considered the additional claim made; d. Fourthly, it is respectfully submitted that the purpose of assessment is to compute the correct taxable income of the assessee as per the provisions of the Act and even if the subsidy incentive was wrongly offered for tax in the return of income by the assessee, which was clearly not liable to tax, the assessing officer was duty bound to consider and allow such claim suo-motu, while framing the assessment. In any case, once the claim was made, the AO ought to have considered to determine correct taxable income. [refer Circular No. ITA No. 5251 to 5257/DEL/2015 [A.Y 2006-07 to A.Y 2012-13] ITA No. 5451/DEL/2016 [A.Y 2013-14]; ITA No. 4492/DEL/2017 [A.Y 2014-15] M/s Jindal Photo LtdVs.The A.C.I.T Page 22 of 63 14 (XL-35) dated 11.04.1955; CIT vs. Mahindra Mills. 24 ITR 56 (SC), CIT vs. Simon Carves Ltd.: 105 ITR 212 (SC); CIT vs. Mahalaxmi Sugar Mills Co. Ltd.: 160 ITR 920 (SC), Anchor Pressings (P) Ltd. vs. CIT and Ors.: 161 ITR 159 (SC), National Thermal Power Limited vs. CIT: 229 ITR 383(SC), CIT vs. Bharat General Reinsurance: 81 ITR 303 (Del) Chokshi Metal Refinery vs. CIT: 107 ITR 63 (Guj)]; 30. Regarding the issue of fresh claim being made during proceedings u/s 153A initiated pursuant to search, it was submitted that even under the provisions of section 153A of the Act, where assessment is made pursuant to the search proceedings, there is no bar for an assessee to make a legitimate claim. It was submitted that it is now well settled proposition of law that the restrictions on the power of the Revenue in the course of proceedings under section 153A of the Act, in respect of non-abated/concluded assessments, is in respect of addition/disallowance, which cannot be made de hors any incriminating material found/unearthed during the course of search, however there is no restriction against the assessee making a claim legitimately allowable under the provisions of the Act, merely on the ground that the proceedings in question are search assessment and not ITA No. 5251 to 5257/DEL/2015 [A.Y 2006-07 to A.Y 2012-13] ITA No. 5451/DEL/2016 [A.Y 2013-14]; ITA No. 4492/DEL/2017 [A.Y 2014-15] M/s Jindal Photo LtdVs.The A.C.I.T Page 23 of 63 regular assessment proceedings. In fact, once the proceedings under section 153A is initiated, pursuant to search under section 132 of the Act, the assessing officer/CIT(A) is bound to consider the additional revised claim raised by the appellant during the course of assessment proceedings. 31. With respect to the contention of fresh claim ought to be considered in abated proceedings pursuant to search, the ld AR stated that abated proceedings merges with 153A proceedings and therefore, scope of 153A proceedings extend to scope of abated proceedings, as held in following: CIT vs. Kabul Chawla: 380 ITR 573 (Del) [affirmed in PCIT vs. Abhisar Buildwell (P.) Ltd: 454 ITR 212 (SC)] - All Cargo Global Logistics Ltd. vs. DCIT: 137 ITD 26 (Mumbai) CIT vs. Continental Warehousing Corporation (Nava Sheva) Ltd.: 374 ITR 645 Therefore, the ld AR submitted that it is entitled to raise fresh legal claim in 153A proceedings, since the claim could have been raised in regular assessment proceedings. 32. With respect to merits of the case, the ld AR submitted that the assessee has three manufacturing units located at Union Territory (UT) of Dadra and Nagar Haveli, namely, Unit-1, Unit-II and PPD Unit. It is ITA No. 5251 to 5257/DEL/2015 [A.Y 2006-07 to A.Y 2012-13] ITA No. 5451/DEL/2016 [A.Y 2013-14]; ITA No. 4492/DEL/2017 [A.Y 2014-15] M/s Jindal Photo LtdVs.The A.C.I.T Page 24 of 63 submitted that to incentivize industries and for employment generation, the Administrator of Dadra and Nagar Haveli, in larger public interest, vide Notifications dtd. 04.01.1984, provided incentive in the form of exemption from payment of sales tax to industries engaged in manufacture and sale of goods at UT of Dadra and Nagar Haveli for a period of 15 years, which was further extended from time to time. 33. The aforesaid \"purpose”, being industrial development, create employment opportunities and to ensure optimum utilization of human and state resources, is evident from the following: • State Industrial Profile of Dadra & Nagar Haveli for FY 2015-16 @ pgs 68-93 @ 75 of supp PB- II explaining the industrial scenario in detail, including the fact that initially incentives were extended in the form of cash subsidies, which was later extended in the form of sales tax exemption; • Letter dtd. 30.11.2013 of Administrator of UT of Dadra & Nagar Haveli (@pgs 58-60 @ 58 of supp PB-II), which categorically states that Sales Tax Exemption was introduced in 1984 with a view to encourage industrialization and provide employment opportunities for the local population; ITA No. 5251 to 5257/DEL/2015 [A.Y 2006-07 to A.Y 2012-13] ITA No. 5451/DEL/2016 [A.Y 2013-14]; ITA No. 4492/DEL/2017 [A.Y 2014-15] M/s Jindal Photo LtdVs.The A.C.I.T Page 25 of 63 • Certificate of exemption dated 08.03.2002 obtained by the appellant for PPD Unit, which provides conditions to be fulfilled for being entitled to the sales tax exemption (@ page 42 of main PB for AY 2009-10) • Sales Tax Act was implemented, and the Industrial Units were eligible for sales tax exemption for a period of 15 years (@ page 44-45 of main PB for AY 2009-10) 34. The ld AR argued that where grant of subsidy is for meeting capital expenditure, for achieving a national objective/purpose inpublic interest, the same would be in the nature of capital receipt not liable to tax and relied on the following decisions: • CIT V. Ponni Sugar and Chemicals Limited: 306 ITR 392 • CIT vs. Chaphalkar Brothers: 351 ITR 309 (Bom HC) affirmed by SC vide order dated 07.12.2017 in 400 ITR 279 (SC) • Shree Balaji Alloys vs. CIT: 333 ITR 335 (J&K) - SLP dismissed • DCIT vs. Reliance Industries Limited: 88 ITD 273 (Mum SB) 35. The ld AR emphasized that in the context of the very same units which were subsequently demerged to Jindal Poly Films Ltd, AO in AY 2016-17 vide order dated 30.10.2023, accepted that the incentive/subsidy is capital in nature. ITA No. 5251 to 5257/DEL/2015 [A.Y 2006-07 to A.Y 2012-13] ITA No. 5451/DEL/2016 [A.Y 2013-14]; ITA No. 4492/DEL/2017 [A.Y 2014-15] M/s Jindal Photo LtdVs.The A.C.I.T Page 26 of 63 36. The ld AR concluded his argument by stating that the finding of AO/CIT(A) are erroneous in view of following: (a) Nature of subsidy is determined on application of \"purpose test\" and not the manner and/or timing of its receipt [refer Ponni Sugar (supra)]; (b) Fact whether there is obligation as to utilisation of incentive/ subsidy or not is not relevant to determine nature [refer Chaphalkar Brothers (supra)]; (c) Mere fact that subsidy is granted in the form of exemption, cannot be regarded as notional in nature [refer Ponni Sugar (supra), Chaphalkar Brothers (supra) and Reliance Industries (supra)]; (d) Manner of accounting is irrelevant [refer CIT v. Triveni Engineering: 239 CTR-216 (Del)] 37. Per contra, the ld DR argued that in the present case for the aforesaid AYs 2006-07 to 2011-12, no fresh claim or additional deduction or exemption can be made other than by way of filing revised return u/s 139(5) and relied on the decision of Goetze (India) Ltd. vs. Commissioner of Income-tax [2006] 157 Taxman 1 (Supreme ITA No. 5251 to 5257/DEL/2015 [A.Y 2006-07 to A.Y 2012-13] ITA No. 5451/DEL/2016 [A.Y 2013-14]; ITA No. 4492/DEL/2017 [A.Y 2014-15] M/s Jindal Photo LtdVs.The A.C.I.T Page 27 of 63 Court)[24-03-2006]; Orissa Rural Housing Development Corpn. Ltd. v. Assistant Commissioner of Income-tax, Circle 1(1), [2012] 17 taxmann.com 186 (Orissa High Court) and Menezes Fernandes Enterprises vs. Income-tax Officer, Ward-4, Margao, Goa [2013] 30 taxmann.com 388 (Bombay High Court) [21-01-2013]. 38. The ld DR further argued that no fresh claim for any deduction or allowance is admissible during proceedings u/s 153A and stated that in case of completed/unabated assessment years 2006-07 to 2009-10, no fresh claim is admissible and relied on Principal Commissioner of Income-tax, Central-3 vs. Abhisar Buildwell (P.) Ltd. [2023] 149 taxmann.com 399 (Supreme Court) [24-04-2023]; Jai Steel (India), Jodhpur vs. Assistant Commissioner of Income-tax [2013] 36 taxmann.com 523 (Rajasthan High Court) [24-05-2013] and Suncity Alloys (P.) Ltd. vs. Assistant Commissioner of Income-tax [2009] 124 TTJ 674 (ITAT Jodhpur Bench) [19-08-2009]. 39. The ld DR forcefully further argued that the proceedings u/s 153A are for the benefit of Revenue and not assessee. The ld DR submitted that section 153A is at par with section 147 since object of section 153A is to bring under tax undisclosed income which is found ITA No. 5251 to 5257/DEL/2015 [A.Y 2006-07 to A.Y 2012-13] ITA No. 5451/DEL/2016 [A.Y 2013-14]; ITA No. 4492/DEL/2017 [A.Y 2014-15] M/s Jindal Photo LtdVs.The A.C.I.T Page 28 of 63 during search, whereas section 147 deals with assessment/reassessment of escaped income and relied on Commissioner of Income-tax vs. Sun Engineering Works (P.) Ltd. [1992] 64 Taxman 442 (Supreme Court) [17-09-1992]; DCIT Vs Sew Infrastructure Ltd ITAT Hyderabad (Special Bench) dated 07.10.2024 and Charchit Agarwal vs. Assistant Commissioner of Income-tax, Central Circle 12, New Delhi [2009] 34 SOT 348 (ITAT Delhi B Bench) [28-08-2009]. 40. In the rejoinder to the ld AR efforts to distinguish the case of Wipro Ltd (supra), the ld DR submitted that the Hon'ble Apex Court in the Wipro Ltd.(supra) case has categorically held that statutory timelines are mandatorily required to be followed especially while claiming exemptions from taxability. The time limits for filing of return u/s 139(1) or filing of revised return u/s 139(5) are both mandatory and specific statutory time limits and, hence, any claim for exemption from taxability not made in either of these returns is liable to be rejected as per the unambiguous ratio of the judgment in Wipro Ltd. case. Therefore, the contention of the Ld. Counsel that the judgment in the Wipro Ltd is not applicable to the present case is not tenable and, hence, liable to be rejected. ITA No. 5251 to 5257/DEL/2015 [A.Y 2006-07 to A.Y 2012-13] ITA No. 5451/DEL/2016 [A.Y 2013-14]; ITA No. 4492/DEL/2017 [A.Y 2014-15] M/s Jindal Photo LtdVs.The A.C.I.T Page 29 of 63 41. With regard to the ld AR reliance upon the judgment of the Hon'ble Supreme court in the case of Wipro Finance Ltd Vs. CIT[2022] 443 ITR 250 (SC) in support of its argument that the decision of the Hon'ble Apex Court in the case of Goetze (India) Ltd. vs. Commissioner of Income-tax [2006] 157 Taxman 1 does not place any restrictions on powers of the Tribunal in admitting fresh claims not made by way of any valid return/revised return of income, the ld DR made the following submissions: i) At the outset, it is pertinent to note that in the above Wipro Finance case, the issue of making the fresh claim for the first time before the tribunal was not even the main question before the Hon'ble SC as evident from the opening sentence of Para 10 wherein Hon'ble Court has noted that the learned ASG appearing for the department had faintly argued this aspect. ii) In the Wipro Finance Case, the fresh claim was made for the first time before the Tribunal unlike the present case wherein the claim was made before the AO itself albeit other than by way of a valid revised return. Hence, the crucial facts of the Wipro Financecase are distinguishable from the facts of the present case. ITA No. 5251 to 5257/DEL/2015 [A.Y 2006-07 to A.Y 2012-13] ITA No. 5451/DEL/2016 [A.Y 2013-14]; ITA No. 4492/DEL/2017 [A.Y 2014-15] M/s Jindal Photo LtdVs.The A.C.I.T Page 30 of 63 iii) In the Wipro Finance case, Hon'ble Court, observing the express recording by the ITAT to the effect that no objection was given by the representative of the department to allowing the appellant to setup the fresh claim for the first time before the Tribunal, held that the objections now taken up by the department before the Apex Court could not be countenanced. Whereas in the instant appeals, the fresh claim has vehemently been objected to by the CIT(DR) as well as rejected by both the AO as well as the CIT(A). iv) Further even on merits of this aspect, it is important to note that the judgment in Wipro Finance Ltd. (supra) nowhere over rules or contradicts the earlier judgment in Goetze (India) ltd. (supra). Even in the Wipro Finance decision Hon'ble Apex Court has referred to its observations in Goetze case only qua the difference in powers of the A.O and the Tribunal u/s 254 in admitting fresh claims made otherwise than by a valid ITR/ revised ITR. 42. The ld DR averred that it is evident that the Hon'ble Court in the case of Goetze has commented on the power of the ITAT u/s 254 only in the context of its own earlier decision in NTPC Ltd. Vs. CIT [1998] ITA No. 5251 to 5257/DEL/2015 [A.Y 2006-07 to A.Y 2012-13] ITA No. 5451/DEL/2016 [A.Y 2013-14]; ITA No. 4492/DEL/2017 [A.Y 2014-15] M/s Jindal Photo LtdVs.The A.C.I.T Page 31 of 63 229 ITR 383. In the NTPC case, the claim was not at all made before the AO and was for the very first time made before the ITAT which was held to be allowable by the Hon'ble Supreme Court in view of the specific facts & circumstances of that case. Same was the situation in Wipro Finance case too. Whereas in the Goetze case, the claim was made before the AO itself during the course of assessment proceedings, unlike in NTPC case, and the disallowance of the claim by the AO was upheld by the Tribunal also. It is very important to note that in the Goetze case, Hon'ble Supreme Court upheld the disallowance of fresh claim by the AO and did not direct the Tribunal to admit the claim despite the assessee raising NTPC plea. It shows the Hon'ble Apex Court has not accepted the argument that NTPC ratio is to mean that in each & every case, the Tribunal has unfettered powers to admit fresh claims. The relevant facts of the present case at hand are identical to the facts in the Goetze case and not to the facts of the NTPC case or Wipro Finance case as in the present case also the claim was made by the assessee before the AO itself, by way of a letter during assessment proceedings, and was not made for the first time before the Tribunal. The contention of the assessee that though the AO cannot accept the fresh claim, ITAT can very well do it, goes ITA No. 5251 to 5257/DEL/2015 [A.Y 2006-07 to A.Y 2012-13] ITA No. 5451/DEL/2016 [A.Y 2013-14]; ITA No. 4492/DEL/2017 [A.Y 2014-15] M/s Jindal Photo LtdVs.The A.C.I.T Page 32 of 63 directly in teeth of the judgment in the Goetze case and renders it to nullity, which is not permissible. 43. The ld DR further emphasized that in the NTPC case too, Hon'ble Apex Court has nowhere held that the Tribunal has unfettered powers to admit each and every fresh claim made otherwise than by way of a valid ITR. The NTPC judgement lays down following conditions for admission of fresh claim by the Tribunal: (a) Claim is made for the first time before the Tribunal (b) There must be a bonafide and good reasons as to why the claim could not have been raised earlier by the assessee (c) The claim should purely be a question of law arising from the facts which are already on record in the assessment proceedings. 44. The ld DR submitted that none of the above conditions are found fulfilled in the present case at hand as discussed below: (a) Claim was made before the AO himself during the course of assessment proceedings u/s 153A. Hence it is not a case of fresh claim made for the first time before the Tribunal. ITA No. 5251 to 5257/DEL/2015 [A.Y 2006-07 to A.Y 2012-13] ITA No. 5451/DEL/2016 [A.Y 2013-14]; ITA No. 4492/DEL/2017 [A.Y 2014-15] M/s Jindal Photo LtdVs.The A.C.I.T Page 33 of 63 (b) the question involved is a mixed question of law as well as facts. The very amount of the sale tax subsidy/incentive received by the assessee is nowhere available in the ITR or audited financial statements. Therefore, even the factual accuracy of the claim remains unverified. (c) the assessee has not explained any reason, let alone any good reason, for not making the claim in any of the ITRs filed since commencement of the Dadra & Nagar Haveli Government's sale tax incentive scheme way back 1984 till A.Y 2012-13. The claim was not made by the assessee even in the returns filed in response to notice issued u/s 153A after the search dated 14.11.2011. The lame explanation sought to be offered by the assessee that the fresh claim was made on the advice of some new Counsel hired by the assessee post search action u/s 132 cannot be considered to be any good reason to justify admission of the claim. 45. It was further submitted that in the NTPC judgment, Hon'ble Supreme Court has referred to and reiterated its earlier decision in Jute Corporation of India Ltd Vs. CIT [1991] 187 ITR 688 wherein the Hon'ble Apex court observed that an appellate authority has all the powers which the original authority may have in the matter. In this ITA No. 5251 to 5257/DEL/2015 [A.Y 2006-07 to A.Y 2012-13] ITA No. 5451/DEL/2016 [A.Y 2013-14]; ITA No. 4492/DEL/2017 [A.Y 2014-15] M/s Jindal Photo LtdVs.The A.C.I.T Page 34 of 63 context it is important to note that, as per the Goetze ratio, the AO, undisputedly, did not have any power to admit the fresh claim of the sale tax incentive being a capital receipt made by the assessee for the first time during the course of assessment proceedings u/s 153A and, thus, applying the ratio of the decision in Jute Corporation (supra), even the Tribunal does not have any power to admit this claim in appeal before it because it is a settled position of law that what cannot be done directly cannot be allowed to be done indirectly too because otherwise it would defeat the very purpose of the restriction placed on admissibility of claims made other than by way of a valid return or revised return by the Goetze ratio and would render the judgment in Goetze case to nullity. 46. The ld DR finally concluded by stating that : (i) In the present case, as elaborately discussed supra, in so far as AYs 2006-07 to 2008-09 are concerned, the fresh claim made before the assessing officer in the assessment proceedings u/s 153A is liable to be rejected at the threshold itself, being unabated assessment. (ii) For the AY 2009-10 to 2011-12, following the above discussions, it is reiterated that unlike in NTPC case and Wipro Finance Ltd case, the ITA No. 5251 to 5257/DEL/2015 [A.Y 2006-07 to A.Y 2012-13] ITA No. 5451/DEL/2016 [A.Y 2013-14]; ITA No. 4492/DEL/2017 [A.Y 2014-15] M/s Jindal Photo LtdVs.The A.C.I.T Page 35 of 63 fresh claim in the instant case was made by the assessee for the first time not before the Hon'ble Tribunal but before the A.O itself during the course of assessment proceedings u/s 153A and thus, the judgment in Goetze case, and not the judgment in NTPC case or Wipro Finance case, is directly and squarely applicable to the facts of the present case and cannot be rendered nugatory by the Hon'ble Tribunal by admitting the claim which was rightly denied by the AO following the Goetze judgment. The AO cannot be held to have faulted in following the binding judgment of the Hon'ble Apex Court in Goetze case.The ld DR reiterated the importance of strict adherence to the specific statutory timelines prescribed u/s 139(1) and 139(5) as held by the Hon'ble Apex Court in the Wipro Ltd. (supra) judgment already discussed above. 47. With regard to the merits of the claim of sales tax subsidy being a capital receipts for the AYs 2012-13 to 2014-15, the ld DR stated that the sales tax incentive/ subsidy should be held to be Revenue receipt liable to tax under the provisions of the Act. The ld DR submitted that the assessee has received the sales tax subsidy on the basis of Notifications dtd. 04.01.1984 of Administration of Dadra and Nagar Haveli (UT), which in public interest, provided exemption ITA No. 5251 to 5257/DEL/2015 [A.Y 2006-07 to A.Y 2012-13] ITA No. 5451/DEL/2016 [A.Y 2013-14]; ITA No. 4492/DEL/2017 [A.Y 2014-15] M/s Jindal Photo LtdVs.The A.C.I.T Page 36 of 63 from payment of sales tax to industries engaged in manufacture and sale of goods at UT of Dadra and Nagar Haveli for a period of 15 years from the date of first sale of the goods manufactured, which was further extended from time to time. The ld DR firmly emphasized that since the sales tax exemption begins from the date of first sale, the subsidy received is not for the purpose of establishing a capital asset/capital expenditure but for the purpose of running a business. The Ld DR emphatically stressed that on the facts of the case, the decision of hon’ble Supreme Court in the case of Sahney Steel & Press Works Ltd. vs. CIT.[1997] 94 Taxman 368 (Supreme Court) [19-09- 1997] and CIT V. Ponni Sugar and Chemicals Limited: 306 ITR 392 squarely apply. 48. The ld DR further argued that the original scheme vide notification dated 04.01.1984, the public purpose did not include the purpose of creating industrialization and employment. It was only vide the letter dtd. 30.11.2013 of the Administrator of UT of Dadra & Nagar Haveli to JS, MHA, Govt of India, New Delhi, the concept of industrialization and employment opportunities for the local populationwas introduced. Moreover, this letter can not be considered as Public Scheme under which the sales tax subsidy was envisaged. This ITA No. 5251 to 5257/DEL/2015 [A.Y 2006-07 to A.Y 2012-13] ITA No. 5451/DEL/2016 [A.Y 2013-14]; ITA No. 4492/DEL/2017 [A.Y 2014-15] M/s Jindal Photo LtdVs.The A.C.I.T Page 37 of 63 letter mentioning industrialization and employment opportunities for the local populationwas only in the context of seeking extension of Subsidy scheme for a further period of 15 years.The ld DR submitted that it can not change the fact that the sales tax subsidy commenced from the date of first sale and was for the purpose of assistance given to the assessee for carrying on the business of the assessee. 49. The ld DR further relied on CIT vs. Meghalaya Steels Ltd. [2016] 67 taxmann.com 158 (Supreme Court) [09-03-2016] where Hon'ble Supreme Court held that the subsidy/incentive on transport, power, insurance has direct nexus with profits of assessee’s business and are in the nature of Revenue Receipt and thus, to be included in taxable income. The ld DR relied on CIT vs. Bhushan Steels & Strips Ltd. [2017] 83 taxmann.com 204 (Delhi High Court) [13-07-2017] where sales tax subsidy was held as revenue in nature. The same was in CIT vs. Varinder Agro Chemicals Ltd. [2007] 290ITR 147 (Punjab & Haryana High Court)[17-08-2006]. The ld DR referred to the case of L. G. Electronics India Pvt. Ltd Vs Addl. CIT Range-4, New Delhi [2010] 39 SOT 275 (ITAT Delhi D Bench) where sales tax was held to be incidental to sale and hence trading receipts under UP Industrial Policy, 1989 which granted subsidy to new industries to encourage ITA No. 5251 to 5257/DEL/2015 [A.Y 2006-07 to A.Y 2012-13] ITA No. 5451/DEL/2016 [A.Y 2013-14]; ITA No. 4492/DEL/2017 [A.Y 2014-15] M/s Jindal Photo LtdVs.The A.C.I.T Page 38 of 63 setting up of new industrial units. Similarly, in Maruti Suzuki India Ltd. Vs Addl. CIT (ITA No.-6021/Del/2012) dt.09.11.2017, ITAT Delhi I Bench, it was held that where the subsidy is not related to repayment of loan, is only in the nature of revenue receipts. 50. We have heard the rival submissions and have perused the relevant material on record. Having heard the rival submission we find that the facts of the case for AYs 2006-07, 2007-08 and 2008-09 are squarely covered by the decision of the hon’ble Supreme Court in the case of Abhisar Buildwell (supra). The hon’ble court has laid down the law as under: \"in case no incriminating material is unearthed during the search, the Assessing Officer cannot assess or reassess taking into consideration the other material in respect of completed assessments/unabated assessments. Meaning thereby, in respect of completed/unabated assessments, no addition can be made by the Assessing Officer in absence of any incriminating material found during the course of search under section 132 or requisition under section 132A.\" 51. In view of the facts that the AYs 2006-07, 2007-08 and 2008-09 are unabated assessment years and the AO cannot assess or reassess taking into consideration other material, no adjustment in the income can be made in absence of any incriminating material found during the ITA No. 5251 to 5257/DEL/2015 [A.Y 2006-07 to A.Y 2012-13] ITA No. 5451/DEL/2016 [A.Y 2013-14]; ITA No. 4492/DEL/2017 [A.Y 2014-15] M/s Jindal Photo LtdVs.The A.C.I.T Page 39 of 63 course of search. The appeal of the assessee for these AYs fails on this count. We further note that on identical facts in one of the group cases of Jindal Poly Films Ltd in ITA 3360/Del/2016 for AY 2007-08, the coordinate Bench of ITAT has given a finding that for non-abated assessment year, no additional claim can be made u/s 153A. The grounds no. 1 and its sub-grounds of appeal for the above three AYs are dismissed. Though the admission of claim itself has been dismissed, however adjudication on ground 2 related to the merits of the claim will be discussed in later part of the order. 52. With respect to the admissibility of the claim of non-taxability of sales tax subsidy for assessment years 2008-09 to 2011-12, in the 2nd category of cases, we find that for the above three years, on the date of search 14.11.2011, the assessment was pending and therefore they were considered as abated assessment years. The undisputed fact is the assessee, in these three assessment years, had declared the sales tax subsidy as income in the original returns filed u/s 139(1). Though time was available for filing revised return, the assessee, for these three years, did not file any revised return to claim the sales tax subsidy as non-taxable. Subsequent to the search under section 132 on 14.11.2011, the assessee was issued notices under section 153A in ITA No. 5251 to 5257/DEL/2015 [A.Y 2006-07 to A.Y 2012-13] ITA No. 5451/DEL/2016 [A.Y 2013-14]; ITA No. 4492/DEL/2017 [A.Y 2014-15] M/s Jindal Photo LtdVs.The A.C.I.T Page 40 of 63 response to which the assessee filed returns declaring the sales tax subsidy as its income. It was only during the assessment proceedings under section 153A that the assessee claimed the sales tax subsidy as non-taxable by way of revised computation of income. In such a situation we are called upon to decide whether the assessee can make a fresh claim other than by way of filing Revised return u/s 139(5) and whether an additional claim/deduction be made in the proceedings under section 153A. 53. We find that in NTPCthe Hon'ble Apex Court has held that the assessee can make a claim for the first time before the Tribunal with a caveat that the claim should purely be a question of law arising from the facts which are already on record in the assessment proceedings. Further, there must be a bonafide and good reasons as to why the claim could not have been raised earlier by the assessee. Further, in the NTPC case, theHon'ble Court, observed that the Revenue gave no objection to the assessee to setup the fresh claim for the first time before the Tribunal.In the instant case, we find that the claim is firstly made before the AO who rejected the claim. The claim was further put before the CIT(A) but in vain. The claim was made in the ITAT in the ITA No. 5251 to 5257/DEL/2015 [A.Y 2006-07 to A.Y 2012-13] ITA No. 5451/DEL/2016 [A.Y 2013-14]; ITA No. 4492/DEL/2017 [A.Y 2014-15] M/s Jindal Photo LtdVs.The A.C.I.T Page 41 of 63 normal course of appeal proceedings and therefore was not either fresh claim nor was for the first time before the ITAT. Furthermore, the allowability of claim of sales tax subsidy being capital in nature was not automatic and was in serious dispute with the Revenue.In view of this crucial factor, the decision of NTPC and Jute Corporation and Wipro Finance Ltd regarding plenary powers of ITAT u/s 254, do not apply. We are of the considered view that as the claim for exclusion of the sales tax subsidy was made for the first time before the AO, therefore, the decision of the Hon’ble Supreme Court in the case of Goetze India Ltd squarely apply.The assessee agitated this issue before the CIT(A) in regular appeal which was adjudicated by him and rejected, hence the issue was before ITAT in normal course. In view of the above, the assessee can not be allowed a claim without revising the return u/s 139(5) within the due date and mandatory time limits. 54. In this context, the decision in the case of Wipro Ltd is of great relevance. Though it was in the context of specific statutory timeline for withdrawal of claim as mandated under section10B(8), it laid down the importance of fulfillment of statutory conditions namely filing of return under section 139(1) for claiming exemption/deductions. This proposition was further strengthened by the Hon’ble Supreme Court in the later decision in the case of Shriram Investment in Civil appeal no ITA No. 5251 to 5257/DEL/2015 [A.Y 2006-07 to A.Y 2012-13] ITA No. 5451/DEL/2016 [A.Y 2013-14]; ITA No. 4492/DEL/2017 [A.Y 2014-15] M/s Jindal Photo LtdVs.The A.C.I.T Page 42 of 63 6274 of 2013 dated 04.10.2024 where it upheld the decision of Madras High Court that after the revised return was barred by time there was no provision to consider the claim made by the assessee. The hon’ble Supreme Court also noted that the case of NTPC was one where the Department gave no objection for enabling the assessee to setup a fresh claim which makes the instant case distinguishable on facts as in the instant case, the Revenue has raised objection to the claim at every stage, be it the AO, CIT(A) or the Departmental Representative before the ITAT. We are of the opinion that when there is no provision in the Act where the assessee can claim expenses/deduction outside the Return filed u/s 153A, the same has to be rejected. Our conclusions are duly supported by the decision of the Hon’ble Supreme Court in the case of Commissioner of Customs (Imports), Mumbai Vs. Dilip Kumar and Company(AIR 2018 Supreme Court 3606) that the provisions for exemption/deduction has to strictly construed and any perceived ambiguity would necessarily accrue to the benefit of the Revenue. 55. With regard to the issue of merger of original regular assessment with 153A proceedings in abated /incomplete assessment, there is no dispute. It is no longer res-integra that in respect of abated/incomplete assessments, the jurisdiction to make original ITA No. 5251 to 5257/DEL/2015 [A.Y 2006-07 to A.Y 2012-13] ITA No. 5451/DEL/2016 [A.Y 2013-14]; ITA No. 4492/DEL/2017 [A.Y 2014-15] M/s Jindal Photo LtdVs.The A.C.I.T Page 43 of 63 assessment and the assessment under Section 153A merges into one and only one assessment for each assessment year shall be made as held in the case of Kabul Chawla Vs. CIT reported in [2015] 61 Taxmann.com 412, approved by the Hon'ble Supreme Court in the case of PCIT Vs. Abhisar Buildwell (P.) Ltd (supra). The question that arises is whether the assessee can make fresh claim, by way of computation of income, during the proceedings under section 153A and not by way of the original/revised return. 56. We find that the issue of making fresh claim u/s 153A has been succinctly addressed by the Special Bench of ITAT Hyderabad in the case of DCIT Vs Sew Infrastructure Limited, Hyderabad ITAT (Hyd- SB) decided on 7 October, 2024. The Special Bench after analyzing catena of cases and the decision of Kabul Chawla (supra) and PCIT Vs. Abhisar Buildwell (P.) Ltd (supra) and Jai Steel India Ltd (Raj) held that “…..when a search is conducted under Section 132, all pending assessments within the block of six assessment years immediately preceding the assessment year in which such search is conducted abates and the Assessing Officer shall have jurisdiction to assess or reassess the total income of those assessment years on the basis of incriminating material found as a result of the search and any other material or information provided in the returns. ITA No. 5251 to 5257/DEL/2015 [A.Y 2006-07 to A.Y 2012-13] ITA No. 5451/DEL/2016 [A.Y 2013-14]; ITA No. 4492/DEL/2017 [A.Y 2014-15] M/s Jindal Photo LtdVs.The A.C.I.T Page 44 of 63 57. The Special Bench, Hyd emphasized that the assessee has to provide information in the Return for consideration. In the instant case, the exemption of sales tax subsidy was not claimed in the return filed either u/s 139(1) or 139(5) or 153A and hence the claim is not available for the AO to consider. Further dealing with the identical question of entitlement to make a fresh claim, it held as under: “24. Having said so, now let us come back to the question in the present appeals i.e., whether an assessee can make a claim for deduction under Chapter VI-A of the Income Tax Act, 1961, for the first time in the return of income filed in response to the notice issued under Section 153A of the Act, pursuant to search conducted under Section 132 of the Act. This legal position is no longer res integra. The Hon'ble High Court of Rajasthan in the case of Jai Steel (India) Vs. ACIT had considered an identical question of law in light of search conducted u/s 132 of the Act and the fresh claim made by an assessee for the first time in the return filed u/s 153A of the Act and after considering the relevant facts and also by analyzing various case laws, including the decision of Hon'ble Delhi High Court in the case of CIT Vs. Anil Kumar Bhatia reported in (2012) 211 Taxmann.com 453 (supra), which is in favour of the revenue held that it is not open for the assessee to seek deductions or claim expenses which have not been claimed in the original return for which assessment has already been completed only because assessment u/s 153A in pursuance of search or requisition is required to be made. Even otherwise, if we go by plain reading of provisions of Section 153A, it is analogous to erstwhile provisions of Section 158B(1) of the Act. From the above provisions, it is undisputedly clear that the purpose of assessment in relation to search cases is to assess undisclosed income, if any, on the basis of incriminating material found as a result of the search, but not to disturb the completed/unabated assessment. Further, if we go by the argument of the counsel for the ITA No. 5251 to 5257/DEL/2015 [A.Y 2006-07 to A.Y 2012-13] ITA No. 5451/DEL/2016 [A.Y 2013-14]; ITA No. 4492/DEL/2017 [A.Y 2014-15] M/s Jindal Photo LtdVs.The A.C.I.T Page 45 of 63 assessee, in light of the provisions of Section 153A(1)(a) of the Act, once return is filed in response to a notice under Section 153A of the Act, the said return shall be treated as return which was furnished under Section 139 of the Act, in our considered view, it defeats the whole purpose of initiation of search and consequent assessments. In our considered view, although provisions of Section 153A make it very clear that return filed in response to a notice under Section 153A of the Act, partakes the nature of return filed u/s 139 of the Act, said interpretation cannot be enlarged so as to say that even in case where the assessee has filed a regular return under Section 139 and not made any claim towards deduction and further for the first time, the assessee has made a claim of deduction under Section 80IA(4) in the return of income filed in response to notice under Section 153A of the Act, also to be considered as if the assessee has made a claim on or before filing the return under Section 139(1), and further, it is contrary to the scheme of regular assessment and search assessment and is devoid of merits.……….Further, once the assessment is abated, the original return which has been filed loses its originality, and the subsequent return filed u/s 153A of the Act takes the place of the original return. In such cases, the return of income filed u/s 153A(1) of the Act, would be construed to be one filed u/s 139(1) of the Act and the provisions of the Act, shall apply to the same and accordingly, all legitimate claims would be open to the assessee to raise in the return of income filed u/s 153(A)(1) of the Act.” Emphasis supplied 58. The Special Bench time and again emphasized that in cases of abated assessment, the assessee is entitled to make fresh claim in the return filed u/s 153A. In the instant case, the facts shows that the assessee never made any claim for sales tax subsidy exemption in the return filed u/s 153(A).The Special Bench further found that the ITA No. 5251 to 5257/DEL/2015 [A.Y 2006-07 to A.Y 2012-13] ITA No. 5451/DEL/2016 [A.Y 2013-14]; ITA No. 4492/DEL/2017 [A.Y 2014-15] M/s Jindal Photo LtdVs.The A.C.I.T Page 46 of 63 decision of Rajasthan High Court in Jai Steel has been endorsed by the Supreme Court in Abhisar Buildwell as follows: “26. We further note that, although the ratio laid down by the Hon'ble Supreme Court in the case of PCIT Vs. Abhisar Buildwell (P.) Ltd (supra) is in the context of additions made by the AO in the assessments which are unabated/concluded on the date of the search in the absence of any incriminating material found as a result of the search, the Hon'ble Apex Court has in fact approved the ratio laid down by the Hon'ble High Court of Rajasthan in the case of Jai Steel (India) Vs. ACIT, which directly addresses the issue of a fresh claim made by the assessee for the first time in the return of income filed in response to the notice issued under Section 153A of the Act. From the observation of the Hon'ble Supreme Court in Para 8, it is clear that it has approved the ratio laid down by the Delhi High Court in the case of Kabul Chawla (supra) and the Gujarat High Court in the case of PCIT Vs. Saumya Constructions reported in (2016) 387 ITR 529 (Guj) and the Hon'ble High Court of Rajasthan has followed or considered the ratio of these two cases while deciding the issue in the case of Jai Steel (India) Vs. ACIT (supra)”. 58. The Special Bench, on the issue of nature of assessment u/s 153A, referring to the CIT V D.G. Shirke Construction Technology Pvt Ltd (2017) 79 taxmann.com 306(Bom) and Karnataka High Court in G.M.R. Infrastructure Ltd V DCIT in ITA 1036/2017 dated 06.07.2021 held that: 29……..in the case of Jai Steel (India), Jodhpur Vs. ACIT (supra) has held that the assessment or reassessment made in pursuance to section 153A of the Act, is not a denovo assessment and, therefore, it was not open to the ITA No. 5251 to 5257/DEL/2015 [A.Y 2006-07 to A.Y 2012-13] ITA No. 5451/DEL/2016 [A.Y 2013-14]; ITA No. 4492/DEL/2017 [A.Y 2014-15] M/s Jindal Photo LtdVs.The A.C.I.T Page 47 of 63 assessee to claim and be allowed such deduction or allowance of expenditure which it had not claimed in the original assessment proceedings which in the case of assessee stood completed vide order dated 15.01.2009 passed under section 143(1) of the Act. If we go by the observations of the Hon'ble High Court of Bombay and Hon'ble High Court of Karnataka in the above-mentioned case, it is only in the context of abated assessments which are pending as on the date of search under section 132 of the Act, the return filed in response to notice under section 153A of the Act partakes the nature of return filed under section 139 of the Act and the assessee can make/lodge any claim which otherwise, it would have raised in the return of income to be filed under Section 139 of the Income Tax Act, 1961. In other words, in case of unabated/concluded assessments like the AO, who cannot make additions in the absence of any incriminating material, the assessee cannot make any fresh claim, including the claim of deduction under Chapter VI-A of the Act. Therefore, we are of the considered view that the assessee cannot make any fresh claim of deduction or allowance of the expenditure for the first time in the return of income filed under section 153A of the Income Tax Act, 1961. 59. The Special bench, on the issue of the provision of section 153A being analogous to the provision of section 147 in so far as being beneficial to the Revenue, following the decision of Supreme Court in the case of Sun Engineering Works Pvt Ltd[1992] 198 ITR 297 held that : “31…….According to the provisions of Sections 147 and 153A of the Act, although both operate in different fields, the purpose is the same. Section 147 deals with income escaping assessment, and Section 153A deals with assessment consequent to search and seizure under Section 132, where any money, bullion, jewellery, valuable article or things found as a result of the search. Therefore, in our considered view, when the Hon'ble Supreme Court, in very categorical terms, held in light of the provisions of Section 147 of the Act that said provisions are for the benefit of revenue, and the ITA No. 5251 to 5257/DEL/2015 [A.Y 2006-07 to A.Y 2012-13] ITA No. 5451/DEL/2016 [A.Y 2013-14]; ITA No. 4492/DEL/2017 [A.Y 2014-15] M/s Jindal Photo LtdVs.The A.C.I.T Page 48 of 63 assessee cannot make any fresh claim of deduction towards any income or expenditure, then going by the scheme of assessment under Section 153A, there is no doubt that said provisions are only for the purpose of detection of undisclosed money, bullion, jewellery, or any other article or thing and said provisions are also for the benefit of revenue, and the assessee cannot take to its advantage. Therefore, the reliance placed by the revenue on the decision of the Hon'ble Supreme Court in the case of CIT Vs. Sun Engineering Works (P) Ltd (supra) is justified. Thus, we reject the arguments taken by the learned counsel for the assessee.” 60. Thus, the gist of the decision in the case of Sew Infrastructure Limited, Hyderabad is that the assessment/reassessment u/s 153A is not a de-novo assessment and as the assessment emanates from the provisions relating to search u/s 132, it essentially has be related to disclosed and undisclosed income and should have nexus or relevance with seized material as held by the Hon’ble Delhi High Court in the case of Kabul Chawla. We are further of the considered view that the provisions of section 153A is for the benefit of Revenue and it does not envisage a de-novo assessment. Though the assessee may claim any deduction u/s 153A in abated/incomplete assessment, it has to make the claim in the return filed u/s 153A. To reiterate, there is no provision in the Act, where the assessee can claim expenses/deduction outside the Return filed u/s 153A as the provisions for exemption/deduction has to strictly construed in the light of the ITA No. 5251 to 5257/DEL/2015 [A.Y 2006-07 to A.Y 2012-13] ITA No. 5451/DEL/2016 [A.Y 2013-14]; ITA No. 4492/DEL/2017 [A.Y 2014-15] M/s Jindal Photo LtdVs.The A.C.I.T Page 49 of 63 Supreme Court decision Commissioner of Customs (Imports), Mumbai Vs. Dilip Kumar and Company(supra).We again are fortified by the decision of Special Bench as follows: “32……At this stage, we are taking support from the decision of the Hon'ble Supreme Court in the case of Commissioner of Customs (Imports), Mumbai Vs. Dilip Kumar and Company, (supra) wherein the Hon'ble Supreme Court clearly held that beneficial provisions like, deductions/ exemptions provisions are required to be strictly interpreted and any perceived ambiguity would necessarily ensure to the benefit of the revenue. We further note that the Hon'ble Supreme Court, in the case of PCIT Vs. Wipro Ltd (supra) has also considered the interpretation of provisions of Section 10B of the Act and held that such an option should be exercised before the due date under Section 139(1) by way of filing a declaration. Although the said decision was in the context of withdrawal of exemption under Section 10B of the Act, in our considered view, when it comes to the interpretation of exemption and deduction provisions, the said provisions should be strictly interpreted so as to achieve the larger intent of the Legislature. Therefore, we are of the considered view that the arguments of the learned counsel for the assessee that when the appellant filed its return of income in response to a notice under Section 153A of the Act, it partakes the nature of the return filed under Section 139 of the Act and thus, all the conditions prescribed under Section 80A(5) and Section 80AC are satisfied is contrary to law and devoid of merit and cannot be accepted. 61. Coming to the issue on merits of claim of exemption of sales tax subsidy being in the nature of capital/revenue receipt, we are conscious of the fact that the nature of a subsidy has to be decided on ITA No. 5251 to 5257/DEL/2015 [A.Y 2006-07 to A.Y 2012-13] ITA No. 5451/DEL/2016 [A.Y 2013-14]; ITA No. 4492/DEL/2017 [A.Y 2014-15] M/s Jindal Photo LtdVs.The A.C.I.T Page 50 of 63 the basis of “purpose” for which it is granted as held by Hon’ble Supreme Court in the case of Sahney Steel and Press Works versus CIT 228 ITR 253 and CIT versus Ponni Sugar and Chemicals Ltd 306 ITR 392. We have given our careful thought on the various decisions relied upon by the rival sides. 62. In Ponni Sugar (supra), the Hon’ble Supreme Court elaborating the judgment in the case of Sahney Steels(supra)laid down the law in regard to the “purpose test” for determining the nature of incentive being capital or revenue in nature as follows: 14. In our view, the controversy in hand can be resolved if we apply the test laid down in the judgment of this Court in the case of Sahney Steel and Press Works Ltd. (supra). In that case, on behalf of the assessee, it was contended that the subsidy given was up to 10% of the capital investment calculated on the basis of the quantum of investment in capital and, therefore, receipt of such subsidy was on capital account and not on revenue account. It was also urged in that case that subsidy granted on the basis of refund of sales tax on raw materials, machinery and finished goods were also of capital nature as the object of granting refund of sales tax was that the assessee could set up new business or expand his existing business. The contention of the assessee in that case was dismissed by the Tribunal and, therefore, the assessee had come to this Court by way of a special leave petition. It was held by this Court on the facts of that case and on the basis of the analyses of the Scheme therein that the subsidy given was on revenue account because it was 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 was to meet recurring expenses. It was not for acquiring the capital asset. It was not to meet part of the cost. It was not granted for production of or ITA No. 5251 to 5257/DEL/2015 [A.Y 2006-07 to A.Y 2012-13] ITA No. 5451/DEL/2016 [A.Y 2013-14]; ITA No. 4492/DEL/2017 [A.Y 2014-15] M/s Jindal Photo LtdVs.The A.C.I.T Page 51 of 63 bringing into existence any new asset. The subsidies in that case were granted year after year only after setting up of the new industry and only after commencement of production and, therefore, such a subsidy could only be treated as assistance given for the purpose of carrying on the business of the assessee. Consequently, the contentions raised on behalf of the assessee on the facts of that case stood rejected and it was held that the subsidy received by Sahney Steel could not be regarded as anything but a revenue receipt. Accordingly the matter was decided against the assessee. The importance of the judgment of this Court in Sahney Steel case lies in the fact that it has discussed and analysed the entire case law and it has laid down the basic test to be applied in judging the character of a subsidy. That test is that the character of the receipt in the hands of the assessee has to be determined with respect to the purpose for which the subsidy is given. In other words, in such cases, one has to apply the purpose test. The point of time at which the subsidy is paid is not relevant. The source is immaterial. The form of subsidy is immaterial. The main eligibility condition in the scheme with which we are concerned in this case is that the incentive must be utilized for repayment of loans taken by the assessee to set up new units or for substantial expansion of existing units. On this aspect there is no dispute. If the object of the subsidy scheme was to enable the assessee to run the business more profitably then the receipt is on revenue account. On the other hand, if the object of the assistance under the subsidy scheme was to enable the assessee to set up a new unit or to expand the existing unit then the receipt of the subsidy was on capital account. Therefore, it is the object for which the subsidy/assistance is given which determines the nature of the incentive subsidy. The form of the mechanism through which the subsidy is given is irrelevant. Emphasis applied 63. With law on the subject delineated as above, we now come to the facts of the instant case. We find, on facts,that the assessee has largely relied on the Notification dtd. 04.01.1984 granting exemption from payment of sales tax in “public interest” in the context of ITA No. 5251 to 5257/DEL/2015 [A.Y 2006-07 to A.Y 2012-13] ITA No. 5451/DEL/2016 [A.Y 2013-14]; ITA No. 4492/DEL/2017 [A.Y 2014-15] M/s Jindal Photo LtdVs.The A.C.I.T Page 52 of 63 “purpose test” as delineated by the Supreme Court in the case of Sahney Steel (supra) and Ponni Sugar. The assessee further relied on the Letter dtd. 30.11.2013 of Administrator of UT of Dadra & Nagar Haveli which states that Sales Tax Exemption was introduced in 1984 with a view to encourage industrialization and provide employment opportunities for the local population. The assessee also relied on the State Industrial Profile of Dadra & Nagar Haveli for FY 2015-16 explaining the industrial scenario in detail. 64. We find that the said notification was followed by another similar notification dated 31st December 1999. The assessee, under this notification, obtained Certificate of exemption from payment of sales tax dated 08.03.2002 for PPD Unit for manufacture/process/assembled in the Union Territory of Dadra & Nagar Haveli. The condition imposed for the said exemption was that assessee shall issue serially cash/ credit/memos for sales of finished goods which will contain the demon address of the purchaser, descriptions of goods sold and its value, exemption certificate number, date and signature of seller. The condition also stipulated that the assessee shall maintain sales and purchase and stock register for the said manufactured product as such. This certificate was valid from 14.04.2001 to 13.04.2016. ITA No. 5251 to 5257/DEL/2015 [A.Y 2006-07 to A.Y 2012-13] ITA No. 5451/DEL/2016 [A.Y 2013-14]; ITA No. 4492/DEL/2017 [A.Y 2014-15] M/s Jindal Photo LtdVs.The A.C.I.T Page 53 of 63 65. We find that the assessee has heavily relied on the letter of 2013, written by Administrator of Union territory of the Dadra and Nagar Haveli, to JS, MHA New Delhi seeking to extend the date of grant of exemption for the proposition that this letter expresses the “purpose” of the Exemption Notification of 1984 which was to encourage industrialization and provide employment opportunities for the local population. We find that in this letter, the Administrator has narrated the result of the initiative taken for sales tax exemption vide notification in 1984 that led to increase in industrial Units in the area and there was large investment made in the area. We are of the considered view that this letter, on which the assessee is drawing support from, is essentially an internal correspondence within two government authorities describing the outcome of the incentive scheme of 1984 and 1999 and on the basis of the outcome, the Administrator is seeking to extend the duration of exemption for another 15 years. We are of the considered opinion that this internal correspondence cannot be considered as a public document or a public scheme as juxtaposed to Scheme notified and published in official Gazette vide Notification of 1984 and 1999. We are also of the view that the State profile also cannot be considered as part of Exemption ITA No. 5251 to 5257/DEL/2015 [A.Y 2006-07 to A.Y 2012-13] ITA No. 5451/DEL/2016 [A.Y 2013-14]; ITA No. 4492/DEL/2017 [A.Y 2014-15] M/s Jindal Photo LtdVs.The A.C.I.T Page 54 of 63 Scheme as it only supplies information regarding industrialization profile of the UT territory.What is of significant relevance is the Exemption Notification from which we have to decipher the “purpose” for which the incentive is given. The said Notification states that it is issued in ‘public interest’ and every unit would be entitled to avail the incentive on goods manufactured in the UT area and would be available from the First sale. In view of the above discussion, we are not inclined to accept the assessee’s proposition that the sales tax exemption scheme was primarily for the purpose of establishment and construction of industrial units. We are inclined to agree with the CIT(A) that the ‘public interest’ referred to in the said notification of 1984 and 1999, do not mean exemption to be a ‘capital receipt’ as all incentives whether revenue or capital are given by the government for public interest only. The mere term ‘public interest’ is not sufficient to determine the ‘purpose test’ as enumerated in the case of Sahney Steel and Ponni Sugars (supra). 66. Coming to the fact of incentive Scheme as per the notification of 1984 and 1999, we do not find that the Scheme, as such, anywhere mentions the term industrialization or improvement in infrastructure facility or creation of employment etc or any purpose of incentive being used towards loan payment or creation of any asset. The Scheme ITA No. 5251 to 5257/DEL/2015 [A.Y 2006-07 to A.Y 2012-13] ITA No. 5451/DEL/2016 [A.Y 2013-14]; ITA No. 4492/DEL/2017 [A.Y 2014-15] M/s Jindal Photo LtdVs.The A.C.I.T Page 55 of 63 simply provides that the industry/Units will be exempted from payment of sales tax levied under the Sales Tax Act on sale of goods manufactured, processed or assembled for a period of 15 years from the date of First sale or from the date of 1st consignment branch/transfer. We therefore are of the considered view that the Scheme is applicable only after the unit is setup and the manufacturing activity has started and the sale of goods manufactured, has commenced. We therefore find that the subsidy of sales tax has been given to the assessee for assisting the assessee in carrying out the business operation and for the purpose of trade as the sales tax subsidy is related to trading receipts on revenue account. Our view is fortified by the conditions imposed on the assessee by the said scheme which related to maintenance of sales/purchase and stock register and cash/credit/memos for sales of finished good. In view of the same, the Sales Tax Subsidy would therefore constitute revenue receipt as held in the held by Supreme Court in the case of Sahney Steel and Press Worksand Ponni Sugar(supra). 67. We are of the considered view that the “purpose” of the scheme for which the subsidy was given in the instant case was not to enable the assessee to set up a new unit or to expand existing unit. In our considered view the purpose of the Scheme was to assist the assessee ITA No. 5251 to 5257/DEL/2015 [A.Y 2006-07 to A.Y 2012-13] ITA No. 5451/DEL/2016 [A.Y 2013-14]; ITA No. 4492/DEL/2017 [A.Y 2014-15] M/s Jindal Photo LtdVs.The A.C.I.T Page 56 of 63 in carrying out its business. The sales tax subsidy was not for the purpose of repayment of loan taken by the assessee or to set up units or for substantial expansion of existing units. The Scheme nowhere indicates that it is to meet a part of the cost or it was granted for production of or bringing into existence any assets. The facts of the case shows that the subsidy was given to meet recurring expenses and not for acquiring capital asset. The subsidy in this case were granted year after year from 2002 to 2016, only after setting up the new industry and only after commencement of production and,therefore,such a subsidy could only be treated as assistance given for the purpose of carrying on business of assessee. Further, we find that the assessee was free to use the money in its business entirely as it liked. The Scheme does not obligate the assessee to use the incentive for a particular purpose. The decision in the Sahney Steeltherefore, squarely applies on the facts of the instant case and therefore we hold that the sales tax subsidy received by the assessee can only be treated as revenue receipt and be included as taxable income. The decision in the case of Ponni Sugar, where the incentive/subsidy was held as capital receipt as the assessee was obliged to utilize the incentive for the purpose of repayment of loan for setting up new units, also supports the same view. ITA No. 5251 to 5257/DEL/2015 [A.Y 2006-07 to A.Y 2012-13] ITA No. 5451/DEL/2016 [A.Y 2013-14]; ITA No. 4492/DEL/2017 [A.Y 2014-15] M/s Jindal Photo LtdVs.The A.C.I.T Page 57 of 63 68. The decision of the Special Bench Mumbai in the case of DCIT V Reliance, reliedupon by the assessee, is of no assistance to the assessee as in that case the assessee became entitled to the sales tax incentive even before the commencement of production. So is the case of CIT Vs Rasoi Ltd relied upon by the assessee, where Calcutta High Court held that the subsidy was for expansion of assessee capacities, modernization, and improving marketing capabilities and thus was on capital account. Similarly, in Shree Balaji Alloys case decided by the J&K High Court, it was held that the subsidy given was for setting up new unit in J & K. The case of CIT V Chaphalkars Brothers, where the Bombay High Court held that development of multiplex theatre complexes which are capital intensive in nature and hence the amount of entertainment tax collected and retained, was held as capital in nature, is also of no help to the assessee. 69. On the other hand, the case of Meghalaya Steels relied upon by the revenue are squarely applicable where the Hon’ble Supreme Court held that where subsidies were reimbursed to assessee for elements of cost relating to manufacture or sale of their products and, thus, there was certainly a direct nexus between profits of assessee's business and reimbursement of such subsidies, the subsidy partakes the nature of revenue. The Hon’ble Delhi High Court in the case of Bhushan Steel ITA No. 5251 to 5257/DEL/2015 [A.Y 2006-07 to A.Y 2012-13] ITA No. 5451/DEL/2016 [A.Y 2013-14]; ITA No. 4492/DEL/2017 [A.Y 2014-15] M/s Jindal Photo LtdVs.The A.C.I.T Page 58 of 63 Strips Ltd, in respect of policy and its objective, very succinctly held that where manufacturing unit is already set up, the sales tax retained by the assessee is revenue in nature and industrialization of the State and generation of employment are only a by-product. It held as under: “26. How a state frames its policy to achieve its objectives and attain larger developmental goals depends upon the experience, vision and genius of its representatives. Therefore, to say that the indication of the limit of subsidy as the capital expended, means that it replenished the capital expenditure and therefore, the subsidy is capital, would not be justified. The specific provision for capital subsidy in the main scheme and the lack of such a subsidy in the supplementary scheme (of 1991) meant that the recipient, i.e. the assessee had the flexibility of using it for any purpose. Unlike in PonniSugars (supra), the absence of any condition towards capital utilization meant that the policy makers envisioned greater profitability as an incentive for investors to expand units, for rapid industrialization of the state, ensuring greater employment. Clearly, the subsidy was revenue in nature.” Emphasis supplied. 70. The hon’ble Delhi Court above clearly held that in absence of any specific condition towards capital utilization in the Scheme, the subsidy/incentive received would be for enhanced profitability of the assessees and hence revenue in nature, a stipulation totally applicable to the facts of the instant case. The decision of CIT vs. Varinder Agro Chemicals Ltd relied upon by the Revenue also supports the Revenue case where Sales tax subsidy received by assessee was considered as a revenue receipt. Similarly in L. G. Electronics India Pvt. Ltd Vs Addl. CIT Range-4, New Delhi [2010] 39 SOT 275 (ITAT Delhi D Bench) sales ITA No. 5251 to 5257/DEL/2015 [A.Y 2006-07 to A.Y 2012-13] ITA No. 5451/DEL/2016 [A.Y 2013-14]; ITA No. 4492/DEL/2017 [A.Y 2014-15] M/s Jindal Photo LtdVs.The A.C.I.T Page 59 of 63 tax collected under the Uttar Pradesh State Industrial Policy, 1989 was considered as part of trading receipts as sales tax element was embedded in sale price and was collected in ordinary course of trading activities. In the case of Maruti Suzuki India Ltd. Vs Addl. CIT (ITA No.- 6021/Del/2012) dt.09.11.2017, ITAT Delhi I Bench, it was held that where any subsidy given to the assessee post accomplishment of the project or expansion there, without any obligation to utilize the subsidy only for repayment of term loans undertaken by the assessee for setting up new units/expansion of existing business, or to liquidate the cost incurred in creating the capital asset or its expansion, is only in the nature of the revenue receipt and is liable to be brought to tax. 71. In view of the discussion as above, we are of the considered view that the sales tax subsidy received by the assessee is in the nature of revenue receipt and the AO has correctly considered the same as revenue receipt. Considering the same, the ground of appeal of the assessee number 1 and 2 in the 2nd category of cases is dismissed. 72. As far as the 3rd category of cases are concerned for assessment year 2012-13 to AY 2014-15, the assessee has claimed the exemption of sales tax subsidy from its taxable income, have been claimed in the revised return for AY 2012-13 and in original return for AY 2013-14 and ITA No. 5251 to 5257/DEL/2015 [A.Y 2006-07 to A.Y 2012-13] ITA No. 5451/DEL/2016 [A.Y 2013-14]; ITA No. 4492/DEL/2017 [A.Y 2014-15] M/s Jindal Photo LtdVs.The A.C.I.T Page 60 of 63 2014-15. The above claim filed are in accordance with the provisions of law. The claim however is liable to be rejected in view of the above decision arrived by us that the sales tax subsidy received by the assessee is in the nature of revenue receipt and therefore taxable. There is no change in facts and the scheme of the sales tax subsidy of the Dadra and Nagar Haweli of 1984 and 1999 in the 3rd category of cases for AYs 2012-13 to 2014-15. The grounds of appeal of the assessee no. 1 and 1.1 are dismissed. 73. We, however find that for the AY 2013-14 and 2014-15, the CIT(A) has held that the assessee has not charged/collected any sales tax from the customers and therefore, sales tax is not included in the gross sales shown in the P&L account and that the assessee has not received any subsidy from the sales tax department and therefore, claim of the assessee is not only imaginary/notional but false also. 74. We have examined the audited accounts from where it emerges that the assessee has adopted two different approach in recognizing the sales tax subsidy in AY 2013-14 and AY 2014-15.In AY 2013-14, the audited accounts show that the sales tax subsidy was apparently included in the total sales in the profit & Loss account but was ITA No. 5251 to 5257/DEL/2015 [A.Y 2006-07 to A.Y 2012-13] ITA No. 5451/DEL/2016 [A.Y 2013-14]; ITA No. 4492/DEL/2017 [A.Y 2014-15] M/s Jindal Photo LtdVs.The A.C.I.T Page 61 of 63 deducted from the total income in the computation of income. In AY 2014-15, the sales tax subsidy was routed through P&L a/c and was directly reduced from the sales. These aspect needs further verification and therefore to the limited extent of this issue, the matter is set aside to the AO to determine whether the sales tax subsidy claim is notional. If it is notional, the allowance of such claim can not arise. Where the sales tax subsidy is routed through P&L a/c, the same will be considered on revenue account. 75. The assessee has relied on the AO’s own decision in the case of Jindal Poly Film Ltd for AY 2016-17 where these units were demerged. It is submitted that in the case of Jindal Poly Film Ltd, the AO has accepted that the incentive/subsidy is capital in nature. We however find that the case of Jindal Poly Film Ltd pertained to the Incentive Scheme of Maharashtra 1993 and the case of Jindal Poly Film Ltd for AY 2007-08 to 2009-10 was decided by the ITAT Delhi vide its order dated 04.06.2024 in ITA no 3360,3361,5645/Del/2016 where it held that sales tax subsidy was capital receipt following the Hon’ble Delhi High Court decision in the case of Indo Rama Synthetics Ltd. The Hon’ble Delhi High Court in the case of Indo Rama Synthetics Ltd, had analyzed the Maharashtra 1993 Scheme and held that where the sole purpose of the scheme was to set up new units and/or expand existing ITA No. 5251 to 5257/DEL/2015 [A.Y 2006-07 to A.Y 2012-13] ITA No. 5451/DEL/2016 [A.Y 2013-14]; ITA No. 4492/DEL/2017 [A.Y 2014-15] M/s Jindal Photo LtdVs.The A.C.I.T Page 62 of 63 units in underdeveloped and developing areas, the sales tax receipts are of capital nature. The case at hand is governed by the Scheme of Dadra and Nagar Haweli of 1984 and 1999 which is substantially different from the Maharashtra Scheme 1993. The Scheme of Dadra and Nagar Haweli do not stipulate any purpose of setting up new units and/or expand existing units in underdeveloped or developing areas. In our considered view therefore, the facts of the instant case being distinguishable from the facts of Jindal Poly Film Ltd, the decision of the coordinate Bench would not apply. 76. In the result, all the appeals of the assessee in ITA No. 5251/DEL/2015 [A.Y 2006-07], ITA No. 5252/DEL/2015 [A.Y 2007-08], ITA No. 5253/DEL/2015 [A.Y 2008-09], ITA No. 5254/DEL/2015 [A.Y 2009-10], ITA No. 5255/DEL/2015 [A.Y 2010-11], ITA No. 5256/DEL/2015 [A.Y 2011-12], ITA No. 5257/DEL/2015 [A.Y 2012-13], ITA No. 5451/DEL/2016 [A.Y 2013-14] and ITA No. 4492/DEL/2017 [A.Y 2014-15] stands dismissed. The order is pronounced in the open court on 21.05.2025 Sd/- Sd/- [VIKAS AWASTHY] [NAVEEN CHANDRA] JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 21st May, 2025. ITA No. 5251 to 5257/DEL/2015 [A.Y 2006-07 to A.Y 2012-13] ITA No. 5451/DEL/2016 [A.Y 2013-14]; ITA No. 4492/DEL/2017 [A.Y 2014-15] M/s Jindal Photo LtdVs.The A.C.I.T Page 63 of 63 VL/ Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) Asst. Registrar, 5. DR ITAT, New Delhi Sl No. PARTICULARS DATES 1. Date of dictation of Tribunal Order 2. Date on which the typed draft Tribunal Order is placed before the Dictation Member 3. Date on which the typed draft Tribunal Order is placed before the other Member 4. Date on which the approved draft Tribunal Order comes to the Sr. P.S./P.S. 5. Date on which the fair Tribunal Order is placed before the Dictating Member for pronouncement 6. Date on which the signed order comes back to the Sr. P.S./P.S 7. Date on which the final Tribunal Order is uploaded by the Sr. P.S./P.S. on official website 8. Date on which the file goes to the Bench Clerk alongwith Tribunal Order 9. Date of killing off the disposed of files on the judiSIS portal of ITAT by the Bench Clerks 10. Date on which the file goes to the Supervisor (Judicial) 11. The date on which the file goes for xerox 12. The date on which the file goes for endorsement 13. The date on which the file goes to the Superintendent for checking 14. The date on which the file goes to the Assistant Registrar for signature on the Tribunal order 15. Date on which the file goes to the dispatch section 16. Date of Dispatch of the Order "