| The Tax Publishers2021 TaxPub(DT) 0287 (Del-Trib) INCOME TAX ACT, 1961
Section 28
As decided in assessee's own case [ITA Nos. 2002/Del/2008, 2130/Del/2008, 967/Del/2010 and 5323/Del/2011, dt. 22-6-2012] [ITA Nos. 2002/Del/2008, 2130/Del/2008, 967/Del/2010 and 5323/Del/2011, dt. 22-6-2012] such subsidy was treated as capital receipt, therefore, sales tax subsidy received by assessee was liable to be treated as capital receipt.
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Business income - Sales tax subsidy - Revenue or capital receipt -
During the course of scrutiny assessment proceedings, AO noticed that assessee had claimed sales tax subsidy as capital receipt was not liable to tax. AO was of the firm belief that the sales tax subsidy received by the assessee was revenue receipt and hence taxable. AO accordingly treated the same as income of the assessee. Held: As decided in assessee's own case [ITA Nos. 2002/Del/2008, 2130/Del/2008, 967/Del/2010 and 5323/Del/2011, dt. 22-6-2012] [ITA Nos. 2002/Del/2008, 2130/Del/2008, 967/Del/2010 and 5323/Del/2011, dt. 22-6-2012] such subsidy was treated as capital receipt. Purpose of granting sales tax incentive was clearly only to provide an incentive for establishment of new industries in the underdeveloped regions or to expand its existing units of the State. That intention is not to increase the viability of eligible units but to promote development of further industry and infrastructure in region. Therefore, action of AO was not sustainable.
Followed:Dy. CIT v. Indo Rama Textiles Ltd ITA No. 678 & 679/Del/2012 : 2012 TaxPub(DT) 2854 (Del-Trib), Indo Rama Synthetics (I) Ltd. v. Asstt. CIT [ITA NOS. 2002/Del/2008, 2130/Del/2008, 967/Del/2010 & 5323/Del/2011, dt. 22-6-2012], Everest Industries Ltd. v. Astt. CIT [ITA. No. 814/Mum/2007, dt. 4-12-2009] and Dy. CIT v. Reliance Industries Limited (2004) 88 ITD 273 (Mum-Trib) : 2004 TaxPub(DT) 29 (Mum-Trib).
REFERRED :
FAVOUR : In assessee's favour.
A.Y. : 2013-14
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