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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 ..... e's appeal - AY 2007-08 (ITA no. 3557/Del/2010): 2. Brief facts of the case are that the assessee is a central Government undertaking engaged primarily in agricultural activities and the main source of income in the relevant year was from agriculture, which had been claimed as exempt u/s 10 of the I.T. Act and, accordingly, not included in the computation of income filed by the assessee. The assessee had filed return of income declaring total income at Rs. 6,25,63,250/-, which comprised of following: a) Income from house property Rs. 52,27,808/- b) Business income Rs. 546,17,971/- c) Income from other sources Rs. 27,17,467/- 2.1. The AO noticed that during the year under consideration the assessee had received subsidy to the tune of R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Commissioner of Income Tax (Appeals) erred, in law and on the facts and circumstances of the case, in directing 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 Rs. 5,04,04,286/- 2. Ld. Commissioner of Income Tax (Appeals) erred, in law and on the facts and circumstances of the case, in holding that the subsidy received by the assessee is not covered u/s 14A of the I.T. Act as the same is merely a reimbursement of expenses by the Government and is not in the nature of income of the assessee." 3. At the outset we may point out that the appeal of the department was earlier dismissed by the ITAT for want of COD approv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sp; 6. Breeder seeds 7764339 4.2. As per the letter no. 8-6/2001-SD.VI dated 27-9-2006, issued by the Ministry of Agriculture, Govt. India, the subsidy was in the form of reimbursement towards expenditure incurred by it on account of 203 qtls. of jute seeds transported from outside the State to Guwahati (Assam) during AY 2006-07. 4.3. Further, as per the letter no. 8-6/2001-SD.VI dated 21-12-2006, issued by the Ministry of Agriculture, Govt. India, Rs. 10,083/- was reimbursement towards expenditure incurred by it on account of 150 qtls. Of wheat seeds transported from CSF Suratgarh to Jammu & Kashmir during AY 2006-07. 4.4. As regards the subsidy for establishment & maintenance of seed bank, as per the letter n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Jammu & Kashmir, Srinagar etc. would constitute revenue expenditure and ought to be deducted 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 Rs. 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. Therefore ground no. 1 of the department is dismissed. 5. As we have held that there is no exempt income, therefore, the question of applicability 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. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isallowance of subsidy received from the Government amounting to Rs. 6,52,82,074/-." 10. In its cross objections for AY 2009-10, the assessee has raised identical grounds as in AY 2007-08, above. 11. We have heard rival submissions and perused the entire material available on record. Undisputedly, the facts of the present case, on the issue in question, is identical to AY 2007-08, above, wherein we have upheld the order of ld. CIT(A), directing 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. In view of our findings for AY 2007-08, we see in force in the appeal of the revenue as well as the cross-objections filed by the assessee. Accordingl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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