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| The Tax Publishers2020 TaxPub(DT) 4133 (Pune-Trib) INCOME TAX ACT, 1961
Section 54
In the light of decision of Chaphlkar Brothers Pune [(2017) 400 ITR 279 (SC) : 2017 TaxPub(DT) 5218 (SC)] it was held that assessee was entitled to treat the Octroi refund as capital in nature and it was not chargeable to tax.
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Income - Revenue receipt or Capital receipt - Subsidy on account of Octroi refund -
Assessee was engaged in the business of manufacturing of connecting rods and automobile components. It received an amount as Octroi Duty refund and claimed the said subsidy granted by State Government as per the scheme of PSI-2007 Scheme to set up plant or development of plant in backward areas. AO treated the same as revenue in nature. Held: If object of assistance under the subsidy scheme was to enable assessee to set up a new unit or to expand the existing unit then receipt should be treated as capital account. In the light of decision of Chaphlkar Brothers Pune [(2017) 400 ITR 279 (SC) : 2017 TaxPub(DT) 5218 (SC)] it was held that assessee was entitled to treat the Octroi refund as capital in nature and it was not chargeable to tax.
Relied:Ponni Sugar & Chemicals Ltd., (2008) 306 ITR 392 (Pune) : 2008 TaxPub(DT) 1395 (Pune-Trib) Sahney Steel & Press Works Ltd., (1997) 228 ITR 253 (SC) : 1997 TaxPub(DT) 1342 (SC) Shri Balaji Alloys v. C.I.T. (2011) 333 I.T.R. 335 (J&K) : 2011 TaxPub(DT) 0882 (J&K-HC)Followed:CIT v. Chaphalkar Brothers reported in (2013) 351 ITR 309 (Bom) : 2013 TaxPub(DT) 1298 (Bom-HC)
REFERRED :
FAVOUR : In assessee's favour
A.Y. : 2014-15
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