9911796707
TMI Blog2013 (7) TMI 617X X X X Extracts X X X X X X X X Extracts X X X X ..... ch notice, he desired to reopen the assessment of the petitioner for the assessment year 2004-05. At the request of the petitioner, the respondent supplied reasons recorded for such reopening, which read as under : "2. In relation to the reassessment proceedings in your case for the assessment year 2004-05, the reasons for the reopening of the pro- ceedings, as recorded earlier during the course of initiation of relevant proceedings, are supplied in detail below : 3. In this case, during the relevant the assessment year 2004-05, the assessee has been engaged in the business of texturising of yarn. It has been found that in the relevant assessment year, the assessee has received subsidy of Rs. 17,33,554 from the Government which has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, however, were rejected by the respondent under order dated August 30, 2011. The peti- tioner has, therefore, filed this petition challenging such notice of reopening of assessment. From the record, it can be seen that the reopening is proposed beyond a period of four years from the end of relevant assessment year. In the rea- sons recorded by the Assessing Officer, though it is stated that the assess- ment of the petitioner for the year under consideration was accepted under section 143(1) of the Act, it is a common ground that such narration is a mere oversight and, in fact, the return was taken in scrutiny and a scrutiny assessment under section 143(3) of the Act was framed. We have, there- fore, proceeded on such basis. Mr. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had received such subsidy of Rs. 17,33,554 way back in the year 1995. The income if at all accrued and was actually received thus nearly ten years back. 7.3 Counsel submitted that mere accounting entry would not make such sum exigible to tax, that too during the year under consideration. The subsidy was given for having set up the plant and machinery, the cost for which the petitioner had already incurred. Diverting such amount for the business of the partnership, therefore, did not make any change in so far as the taxability is concerned. 7.4 Counsel also submitted that the subsidy was a capital receipt in the nature. The same was, even otherwise, not taxable. On the other hand, learned counsel Mr. Manav A. Mehta for the Department oppo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Assessing Officer could form a reasonable belief that income chargeable to tax have escaped assessment. In this respect, we find that admittedly the petitioner received subsidy from the State Government at the rate of 30 per cent. of the investment in the eligible assets which included building, plant and machinery. Such amount was sanctioned and paid in the year 1995. We are not called upon to decide whether such receipt of subsidy was taxable or, as contended by the petitioner being in the nature of capital receipt, was not exigible to tax. Suffice it to say either on accrued or actual receipt, the taxable event did not arise during the year under consideration. If such subsidy receipt invited tax, the petitioner ought to have ..... X X X X Extracts X X X X X X X X Extracts X X X X
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