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TMI Blog2015 (6) TMI 313X X X X Extracts X X X X X X X X Extracts X X X X ..... educted from the revenue receipts. Therefore, ld. CIT(A) had directed the AO to determine the net taxable income after verifying the revenue expenditure and allowing the same to be set off against the revenue receipts of ₹ 5,04,04,286/- i.e. the quantum of subsidy received. We, therefore, do not find any infirmity in the order of ld. CIT(A) on this count. As we have held that there is no exempt income, therefore, the question of applicability of section 14A, in any case, does not arise. - Decided against revenue. - C.O. Nos. 291/D/2010 & 403/Del/2012 ( In ITA nos. 3557/Del/2010 & 4455/Del/2012 ) - - - Dated:- 22-5-2015 - SHRI S.V. MEHROTRA AND SHRI A.T. VARKEY, JJ. For the Appellant : Shri Ramesh Chandra CIT(DR) For t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . He included the subsidy of ₹ 5,04,04,286/- on account of distribution subsidy, seed bank subsidy transport subsidy and production subsidy to the assessee s income. 2.2. Ld. CIT(A) following the order of her predecessor for AY 2002-03, 2003-04 and 2004-05, directed the AO to determine the net taxable income after verifying and allowing revenue expenditure to be set off against quantum of subsidy receipts from the government disclosed at ₹ 5,04,04,280/-. 2.3. Ld. CIT(A) further observed that during the course of proceedings it had been submitted that the subsidy received by the assessee was not covered u/s 14A of the I.T. Act as the same was merely a reimbursement of expenses by the government and was not in the nature o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pages 10 to 15 of the PB. However, no details are there in regard to subsequent proceedings apropos AY 2002-03 to 2006- 07. We, therefore, proceed to decide this appeal. 4. We have considered the submissions of both the parties. The short dispute is whether the subsidy received by the assessee is in the nature of agriculture income or not. As per the annual report of assessee for AY 2006-07, the assessee corporation was managing six farms, namely, Central State Farms at Suratgarh; Sardargarh and Jetsar in Rajasthan; Hisar in Haryana; Bahraich in U.P. and Raichur in Karnataka. 4.1. The operational activities of assessee comprised of test stock seed production; breeder seed production; total seed production; growers seed production. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uratgarh to Jammu Kashmir during AY 2006-07. 4.4. As regards the subsidy for establishment maintenance of seed bank, as per the letter no. 10-1/2006-SD.V dated 7-2-2007, issued by the Ministry of Agriculture, Govt. India, the subsidy was in the form of reimbursement towards maintenance cost of seeds kept in the seed bank under establishment maintenance of seed bank. 4.5. Further, as per the letter no. 10-5/2006-SD.V/Pt. dated 1-11-2006, issued by the Ministry of Agriculture, Govt. India, in respect of funds to NSC, SFCI, GSSC and RSSC the subsidy was in the form of reimbursement towards maintenance cost of seeds kept in the seed bank under establishment maintenance of seed bank. 4.6. From a bare perusal of the above sanctio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lity of section 14A, in any case, does not arise. Accordingly, ground no. 2 is dismissed. 6. In the result department s appeal is dismissed. Assessee s C.O. no. 291/Del/2010 (AY 2007-08): 7. In its cross-objection the assessee has raised following grounds: 1. On the facts and circumstances of the case the learned Commissioner of Income tax (Appeals) has erred in holding that the subsidies received from the Government of India are in the nature of Revenue receipt liable to tax. 2. The learned Commissioner of Income tax ought to have held that the subsidies received were agricultural in nature in so far as the same were for the recoupment of the expenses incurred by the Corporation and as such are part of the agricultural inco ..... X X X X Extracts X X X X X X X X Extracts X X X X
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