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TMI Blog2016 (11) TMI 1245X X X X Extracts X X X X X X X X Extracts X X X X ..... 07 (2) TMI 277 - ITAT PUNE-B ) and had held that the decisions relied by the assessee in support her contention were not applicable to the present fact. Before us, no material has been placed on record by the assessee to controvert the findings of ld. CIT(A). - Decided against assessee. - ITA No.1650/PN/2014 - - - Dated:- 30-9-2016 - MS. SUSHMA CHOWLA, JM AND SHRI ANIL CHATURVEDI, AM For The Appellant : None For The Respondent : Shri P. L. Kureel ORDER PER ANIL CHATURVEDI, AM : This appeal by the assessee is directed against the order of Commissioner of Income Tax (Appeals), Aurangabad dated 21.07.2014 for the assessment year 2010-11. 2. The relevant facts as culled out from the materials on record are as und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , on the date of hearing, none appeared on behalf of the assessee nor any adjournment application was filed. We therefore proceed to dispose of the appeal ex-parte qua the assessee. 4. During the course of assessment proceedings, ld. Assessing Officer noticed that assessee had credited ₹ 10,00,000/- to Reserves and Surplus on account of subsidy received. The assessee was asked as to whether she had reduced the amount of subsidy from the respective block of asset as per the provisions of section 43 read with Explanation 10 to which assessee inter-alia submitted that the amount was received for doing business in backward area and to encourage the entrepreneurs and was therefore not taxable. The ld. Assessing Officer did not agree ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re a portion of cost of an asset acquired by the assessee has been met directly or indirectly by the Central or a State Government or any authority established under any law or by any other person, in the form of a subsidy or grant or reimbursement (by whatever name called), then, so much for the cost as is relatable to such subsidy or grant or reimbursement shall not be included in the actual cost of the asset to the assessee. Provided that where such subsidy or grant or reimbursement is of such nature that it cannot be directly relatable to the asset acquired, so much of the amount which bears to the total subsidy or reimbursement or grant the same proportion as such asset bears to all the assets in respect of or with reference to w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (3) CIT Vs. Jindal Bros. Rice Mills 179 ITR 470 (P H ) - In this case it has been laid down that capital subsidy of 15% allowed by the State Govt. on the cost of plant and machinery, building etc. for setting up industries in backward area would reduce the actual cost thereof within the meaning of section 43(1). The appellant has relied on the following decisions in support of her contention that the Explanation-10 to section 43(1) is not applicable to the case under appeal - (1) Capital Food Export (P) Ltd. Vs. Assttt.CIT A.Y.2007-08 (2012) 139 ITD 584 (Mum) - In this case, it has been laid down that subsidy not granted towards any specific asset or plant machinery is not to be reduced from cost of the assets whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e mechanism of price and duty differential through which it was routed. The Hon'ble Court has not considered Explanation-10 as the same was introduced from A.Y.99-2000 and the year under appeal is 1986-87. (5) Shri Balaji Alloys Vs. CIT (2011) 333 ITR 335 (J K) In this case, Excise refund and interest subsidy was received by the assessee in the State of Jammu Kashmir as per new industrial policy of Central Government. The Hon'ble Court has not considered Explanation-10 to section 43 in view of the fact that no subsidy has been received towards investment in assets. (6) Sasisri Extractions Ltd. Vs. ACIT A.Y.2003-04 (2010) 122 ITD 428 (Vizag) In this case, it has been held that incentive in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re, confirmed. 5. Aggrieved by the order of ld. CIT(A), assessee is now in appeal before us. Before us, ld. DR supported the orders of lower authorities. 6. We have heard the ld. DR and perused the material on record. The issue is in the present case is whether the amount of subsidy received is to be reduced from the block of assets for claiming depreciation. We find that the ld. CIT(A) has given a finding that assessee had received subsidy from State Government under Capital Incentive Scheme on the basis of cost of capital asset acquired by the assessee and it was relatable to the cost of asset and was therefore required to be reduced from the cost of asset as per the provisions of Explanation-10 to section 43 of the Act. The ld. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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