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TMI Blog2017 (2) TMI 551X X X X Extracts X X X X X X X X Extracts X X X X ..... aised two effective grounds. Ground no. 1 is on the issue of availability of deduction of u/s 80 IA on the subsidy received. In ground no. 2 assesse has challenged the nature of subsidy, whether capital or revenue. 3. However, at the outset LD. AR under instruction of his client did not wish to press ground no. 2. Accordingly, ground no. 2 is dismissed as not pressed. 4. As far as ground no. 1 is concerned briefly the fact are, the assesse is an individual. He derives income from various sources including from the business of generation of power by wind mills. In course of assessment proceedings the assessing officer while verifying the return of income filed by the assesse noticed that the assesse had claimed deduction u/s 80 IA of the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fore the CIT (Appeal). Ld. CIT (Appeal) upheld the disallowance made by the assessing officer more or less on identical reasoning relying upon following decision. 1. Sterling Foods Vs. CIT 237 ITR 579. (SC) 2. Hindustan Liver Ltd Vs. CIT 239 ITR 297. 3. CIT Vs. Kiran Enterprises 228 CTR 101. (HP) 5. The Ld. AR submitted, income received by way of Sales Tax incentive and subsidy have a direct nexus to the wind mill project set up by the assesse for generation of power. Therefore, he submitted, such income derived being a profit from the business of the industrial undertaking it will be eligible for deduction u/s 80 IA (4) of the Act. Without prejudice to the aforesaid contention the Ld. AR submitted, that the actual subsidy received from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... subsidy are eligible for deduction u/s 80 IA (4). The departmental authorities have rejected assessee's claim of deduction on the reasoning that such income is not derived from the wind mill business. In this context the departmental authorities have relied upon certain judicial precedents. However, it is worth mentioning in a recent judgment delivered on 9th March 2016 in case of CIT Vs. M/S Meghalaya Steel Ltd. in civil appeal no. 7622 of 2014 the honourable Supreme Court after analyzing a number of decisions of the honourable Supreme Court (including those relied upon by AO and CIT (Appeal) as well as different High Courts has observed, if the subsidies received are towards reimbursement of element of cost relating to manufacture and sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r sources and not from profits and gains of business, which is a separate and distinct head as recognised by Section 14 of the Income Tax Act. Shri Radhakrishnan is not correct in his submission that assistance by way of subsidies which are reimbursed on the incurring of costs relatable to a business, are under the head "income from other sources", which is a residuary head of income that can be availed only if income does not fall under any of the other four heads of income. Section 28(iii)(b) specifically states that income from cash assistance, by whatever name called, received or receivable by any person against exports under any scheme of the Government of India, will be income chargeable to income tax under the head "profits and gains ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unity of being heard to assessee before deciding the issue. In the result assesse's is appeal is allowed for statistical purpose. ITA no.6656/Mum./2011 Dempartment's Appeal for A.Y. 2006-07 9. The registry has pointed out delay of 60 days in filing the appeal by the department. However, in letter dt. 07-10-2011 of the assessing officer, which is placed on record, it is stated that, the date of communication of appeal order has been inadvertently shown as 06-06-2011 instead of 08-08-2011 in column no. 9 of form 36. In view of the aforesaid clarification of the assessing officer, ignoring the delay pointed out by the registry we proceed to hear the appeal. 10. This is an appeal by the department against the relief granted by the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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