2013 (10) TMI 83 - HC - Income Tax

Incentive realized by way of additional quota of free sugar, under Sampat Incentive Scheme, as Capital Receipt - revenue has treated the same as revenue receipt Held that - A perusal of ground of appeal shows that the assessee had not taken any ground in respect of treatment of incentive subsidy - On perusal of the order of the CIT (A) also, it is not borne out that any additional ground is taken by the assessee, which was not adjudicated by him. For substantiating this ground, it was incumbent upon the assessee to show that any application was moved by it before the learned CIT (A) and the same was received in his office. Neither the copy of the application has been filed by the assessee nor any affidavit has been given to show that any such application was filed. For want of evidence, the ground remains unsubstantiated and is rejected accordingly Decided against the Assessee.

Summary

Issues:
1. Treatment of incentive realized under Sampat Incentive Scheme as Capital Receipt.
2. Adjudication of additional ground pertaining to subsidy under the incentive scheme.

Analysis:

Issue 1: Treatment of incentive realized under Sampat Incentive Scheme as Capital Receipt
The appellant, a registered Cooperative Society engaged in sugar manufacturing, filed an appeal under Section 260-A of the Income Tax Act 1961 against the order of the Income Tax Appellate Tribunal disallowing the claim of incentive realized under the Sampat Incentive Scheme as a Capital Receipt. The substantial question of law admitted by the Court pertained to the justification of not adjudicating upon the treatment of the incentive as a Capital Receipt. The Tribunal's order highlighted that the appellant had not raised any specific ground regarding the treatment of the incentive subsidy. The Court observed that there was no evidence presented by the appellant to substantiate the additional ground taken before the CIT (A). Consequently, the Court declined to interfere with the Tribunal's order, stating that the substantial questions of law did not emerge from the orders of the Tribunal, A.O., or CIT (A).

Issue 2: Adjudication of additional ground pertaining to subsidy under the incentive scheme
The appellant contended that the additional ground related to the subsidy under the Sampat Incentive Scheme was not adjudicated by the CIT (A). However, the Tribunal's findings indicated that there was no record of the appellant raising such a ground before the CIT (A). The Tribunal rejected the appellant's claim due to the lack of evidence supporting the additional ground. The Court upheld the Tribunal's decision, emphasizing that the appellant failed to provide any proof of submitting an application or raising the specific ground regarding the subsidy under the incentive scheme. Consequently, the appeal filed by the appellant was dismissed, and the impugned order of the Tribunal was sustained based on the lack of substantiated grounds and evidence presented by the appellant.

In conclusion, the High Court dismissed the appeal filed by the assessee, upholding the Tribunal's order due to the lack of substantiated grounds and evidence supporting the treatment of the incentive realized under the Sampat Incentive Scheme as a Capital Receipt.