2010 (6) TMI 806 - AT - Income Tax

Summary

Issues involved: Appeal against the order of the Ld. Commissioner of Income Tax (Appeals) regarding the addition of sales tax subsidy claimed as capital receipts and the disallowance of depreciation on assets not registered in the name of the assessee for assessment year 2007-08.

Issue 1 - Sales Tax Subsidy:
The appellant contended that the Ld. C.I.T.(A) erred in deleting the addition of sales tax subsidy claimed as capital receipts by the assessee. The Tribunal referred to the assessee's claim for A.Y. 2006-07, where a similar issue was decided in favor of the assessee. The Tribunal noted that the subsidy was treated as capital subsidy by the assessee and reduced from the taxable income. The C.I.T.(A) allowed the claim based on earlier orders of the ITAT and held in favor of the assessee. The Tribunal upheld the C.I.T.(A)'s decision, stating that the issue was already concluded against the department by previous Tribunal orders and Special Bench decisions. The revenue's appeal was dismissed, affirming the C.I.T.(A)'s order.

Issue 2 - Depreciation on Unregistered Assets:
Regarding the disallowance of depreciation on assets not registered in the assessee's name, the Tribunal found that the assets were used in the business, and the C.I.T.(A) had decided in favor of the assessee based on earlier ITAT decisions for the years 1994-95 to 2005-06. The Tribunal noted that the C.I.T.(A) followed the decisions of the ITAT, which were based on Supreme Court precedents. The Tribunal declined to interfere with the C.I.T.(A)'s decision, affirming that no error was committed. The Departmental Representative acknowledged that the issues were covered by the ITAT order in favor of the assessee, although the department was in appeal before the Delhi High Court. Ultimately, the Tribunal dismissed the revenue's appeal, deciding the issues in favor of the assessee based on established precedent.

Separate Judgement: No separate judgment was delivered by the judges in this case.