2017 (4) TMI 1576 - HC - Income Tax

Nature of receipt - subsidy received as Excise duty reimbursement - CIT(A) in directing the AO to delete the addition made to book profits u/s. 115JB an account of excess depreciation and subsidy received by way of excise duty - HELD THAT - For the reasons indicated in our order 2014 (2) TMI 1260 - ITAT MUMBAI the questions as proposed do not give rise to any substantial question of law. Thus, not entertained.

Summary

Issues:
1. Interpretation of the treatment of capital subsidy received under the Bihar Incentive package in relation to the cost of plant and machinery.
2. Determination of whether subsidy received as Excise duty reimbursement can be classified as a revenue receipt.
3. Assessment of the validity of the order directing the deletion of addition made to book profits under section 115JB due to excess depreciation and subsidy received by way of excise duty.

Analysis:
1. The first issue raised was regarding the treatment of capital subsidy received under the Bihar Incentive package concerning the cost of plant and machinery. The Revenue initially posed this question for consideration, but later decided not to press it. Consequently, the Court did not entertain this question as no further arguments were presented, leading to its dismissal.

2. Moving on to the second and third issues, the Revenue questioned whether the subsidy received as Excise duty reimbursement could be considered a revenue receipt and challenged the order directing the deletion of addition made to book profits under section 115JB due to excess depreciation and subsidy received by way of excise duty. The Revenue acknowledged that the Tribunal's decision was based on a previous order for the same Respondent Assessee for the Assessment Year 2008-09. However, the Court had previously dismissed the questions raised in that appeal, finding no substantial questions of law. Consequently, based on the previous ruling, the Court concluded that the proposed questions did not give rise to any substantial legal issues and thus did not entertain them.

3. As a result, the Court dismissed the appeal, emphasizing that the questions raised did not present any substantial legal matters warranting further consideration. No costs were awarded in this matter, and the appeal was concluded without any changes to the Tribunal's order.