2023 (6) TMI 1046 - SCH - Income Tax

Nature of expenses - Expenses incurred for replacement of membrane cells-II - revenue or capital expenditure - HELD THAT - This Court is not inclined to interfere with the impugned judgment and order of the High Court treating it as revenue expense deleting the addition treating the same as capital expenditure by following the rule of consistency. Nature of receipt under the subsidy scheme - subsidy in the form of Sales Tax Exemption as 'capital receipt' or 'revenue receipt - HELD THAT - The special leave petitions are dismissed in the light of orders of this Court in Deputy Commissioner of Income Tax vs. Munjal Auto and Nirma Ltd. 2018 (5) TMI 1738 - SC ORDER The order in Munjal Auto relied upon judgment of this Court in Commissioner of Income Tax vs. M/s Chaphalkar Brothers 2017 (12) TMI 816 - SUPREME COURT . This Court is also satisfied that the terms of the scheme in this case require the recipient of the benefit to set up a new unit or substantially expand the existing unit and utilize substantial portion of the amount retained (at least 50% of the subsidy) for the capital purposes. For these reasons, the impugned judgment does not call for interference. SLP dismissed.

Summary

Issues Involved:
The judgment involves dismissal of special leave petitions, reliance on previous court orders, and satisfaction with the terms of the scheme requiring the recipient to set up a new unit or expand an existing one.

Dismissal of Special Leave Petitions:
The Supreme Court declined to interfere with the impugned judgment and order of the High Court, leading to the dismissal of the special leave petitions. The Court disposed of pending applications related to the petitions.

Reliance on Previous Court Orders:
The dismissal of the special leave petitions was based on the orders of the Court in Deputy Commissioner of Income Tax vs. Munjal Auto and Deputy Commissioner of Income Tax vs. Nirma Ltd. The Court also referenced a judgment in Commissioner of Income Tax vs. M/s Chaphalkar Brothers to support its decision.

Satisfaction with Scheme Terms:
The Court expressed satisfaction with the terms of the scheme in the case, which mandated the recipient of the benefit to establish a new unit or significantly expand an existing one. It was highlighted that a substantial portion of the retained amount, at least 50% of the subsidy, must be utilized for capital purposes. Due to these reasons, the Court concluded that the impugned judgment did not warrant interference.

Separate Judgment:
In a separate matter, the Court ordered to de-tag the case and list it on a specific date for further proceedings.