2019 (9) TMI 1688 - HC - Income Tax

Nature of receipts - interest subsidy receipt by the assessee from the government - capital receipt or revenue receipt - HELD THAT - The question proposed is covered by our decision Principal Commissioner of Income Tax, Central-2, Kolkata versus Ankit Metal Power Ltd. 2019 (7) TMI 878 - CALCUTTA HIGH COURT . Whether petition is a question of fact and not admissible under Section 260A of the Income Tax Act? - As the respondent is represented by learned Counsel, issuance and service of notice of appeal are dispensed with. Let informal paper books be filed by the appellant s advocate-on-record by 15th November, 2019, serving a copy thereof on the advocate-on-record for the respondent at least seven days before the date of hearing of this appeal. On the prayer of Mr. J.P. Khaitan, learned senior counsel appearing for the respondent, leave is granted to file their cross objection in the said appeal by 30 th September, 2019. List this appeal on 27th November, 2019.

Summary

Issues:
1. Whether the tribunal's treatment of interest subsidy receipt as a capital receipt instead of a revenue receipt was perverse?
2. Admissibility of questions of fact under Section 260A of the Income Tax Act, 1961.

Analysis:
1. The High Court admitted an appeal under Section 260A of the Income Tax Act, 1961, based on the substantial question of law regarding the treatment of interest subsidy receipt by the assessee from the government as a capital receipt instead of a revenue receipt. The Court noted the specific amount of Rs.1,84,65,924/- for the assessment year 2009-10 in question. The Court referred to a previous decision in ITA 155 of 2018, where a similar issue was addressed, indicating that the question raised in the present case was covered by that decision. This suggests that there may be a precedent or established interpretation relevant to the issue at hand.

2. The Court also addressed the admissibility of questions of fact under Section 260A of the Income Tax Act, 1961. It was noted that a specific question proposed in the petition was deemed as a question of fact and not admissible under the said section. This distinction is crucial as it highlights the limitations on the types of questions that can be raised and considered under the specified legal provision. The Court's clarification on this matter indicates a strict adherence to legal procedures and requirements in determining the scope of permissible inquiries in such appeals.

Overall, the judgment reflects a meticulous consideration of the legal aspects involved in the appeal, including the characterization of receipts for tax purposes and the boundaries of admissible questions under the relevant statutory provision. The Court's decision to admit the appeal based on the substantial question of law while also clarifying the scope of admissible inquiries demonstrates a balanced approach to addressing the issues raised by the parties involved in the case.