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TMI Blog2016 (6) TMI 1023X X X X Extracts X X X X X X X X Extracts X X X X ..... sposal together. 2. The question of law framed at the time of admitting Tax Appeal No.226 of 2010 reads as under:- "Whether the Appellate Tribunal is right in law and on facts in reversing the order passed by CIT (A) and thereby holding that amount of Sales-tax incentive received by the assessee is a capital receipt?" 3. The questions of law framed at the time of admitting Tax Appeal No.1214 of 2005 reads as under:- "1. Whether the Appellate Tribunal was right in law and on facts in upholding the decision of the CIT (A) to compute deduction u/s.80 HHC on export profits arrived at on the basis of the export turnover and the total turnover exclusive of Excise duty and Sales-tax? 2. Whether the Appellate Tribunal was right in law and on f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessing Officer to consider the Sales-tax exemption benefit of Rs. 5,45,81,171/- as capital receipts is concerned, Mr.Mehta contended that in view of the decision of the Calcutta and Punjab High Court, the Tribunal has committed an error in reversing the view taken by CIT (Appeals) so far as Tax Appeal No.226 of 2010 is concerned, wherein the CIT (A), after discussing the evidence has held in favour of the department. In this regard, he has relied upon the decision of High Court of Bombay in the case of Commissioner of Income Tax v. Reliance Industries Ltd., (2011) 339 ITR 0632, wherein it is held that object of subsidy being to set up new units in backward area is a capital receipt and another decision of High Court of Calcutta in the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vernment of Gujarat on 26/07/91 makes it amply clear that the scheme was announced to attract investment in core sector industry having potential, to spur industrial growth in ancillary, tertiary and secondary sector of the economy. The other scheme announced by the Government of Gujarat as Capital Investment Incentive Scheme on 11th September 1995 was intended to attract investments to generate greater employment in less industrially developed areas of Gujarat and also to secure balanced development of industries in Gujarat through dispersal of industries in the most backward area and backward areas. It is thus clear that the object of both the scheme was to ensure development of backward areas or for development of core sector industries ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d connected appeals, we had an occasion to examine the nature of incentives received by the assessee from the State Government in the form of entertaining tax waiver for setting up multiplexes. In such context, we had in wake of the revenues contention that the receipt was revenue in nature, held and observed as under : "From the provisions of the said scheme, it clearly emerges that the subsidy though computed in terms of sales tax deferment or waiver, in essence it was meant for capital outlay expended by the assessee for set up of the unit in case of a new industrial unit and for expansion and diversification of an existing unit. As noted, such subsidy was available only to a new industrial unit or a unit undertaking expansion or dive ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... td. (supra), this Court has observed as under:- "7. From the provisions of the said scheme, it clearly emerges that the subsidy though computed in terms of sales tax deferment or waiver, in essence it was meant for capital outlay expended by the assessee for set up of the unit in case of a new industrial unit and for expansion and diversification of an existing unit. As noted, such subsidy was available only to a new industrial unit or a unit undertaking expansion or diversification. Fixed capital investment has been defined as to include various investments in land under use, new construction, plant and machinery etc. The entitlement was related to percentage of fixed capital investment. 8. It is undoubtedly true that such subsidy was c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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