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TMI Blog2017 (4) TMI 287X X X X Extracts X X X X X X X X Extracts X X X X ..... the appellant during the year under consideration as promotional subsidy under the PSI of Maharashtra in the capital field and not liable to tax. In view of the above facts, the action of the Ld. AO of treating the said amount of ₹ 91,13,000/- as revenue receipts is erroneous and consequently the addition made by the Ld. AO in this regard is therefore hereby deleted. - Decided in favour of assessee. - I.T.A. No. 224/Nag/2015 - - - Dated:- 30-3-2017 - SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER AND AND SHRI RAM LAL NEGI, JUDICIAL MEMBER Appellant by : Shri A.R. Ninawe Respondent by : Shri K.P. Dewani ORDER Per Shamim Yahya, A. M. This appeal by the Revenue is directed against the order of learned CIT(Appeals)-4, Nag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as reserve in the financial statement. 3. The AO required the assessee to furnish various details of evidences to examine the nature of the said receipts and as to whether the same was required to be treated as revenue receipts and brought to tax. 4. The assessee explained that it had set up an Industrial Undertaking in the Butibori Industrial area and it was a mega project in terms of Package Scheme of Incentives (PSI) 2001 of the Government of Maharashtra and that the preamble of the scheme requires incentives to be provided for setting up such project in view of employment generated and for dispersal of industry. It was further submitted that since the purpose of the subsidy was to provide incentive for setting up industry and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ortant is the purpose of the incentive/subsidy and a mere change in the method of disbursement cannot be lead to a different treatment and the said receipt can not be brought to tax as a revenue receipt. The Special Bench of the Tribunal Reliance Industries Ltd. (Supra) relying on the principles laid down by Supreme Court in the case of Sahney Steel Press Works Ltd. (supra) came to the conclusion that since the incentives were given for bringing about addition to necessary infrastructure in developing the backward area, it would be in the nature of capital receipt not liable to tax. The aforesaid decision of the Special Bench has been rendered on identical facts and is on all fours with the fact of the assessee s case. This is because the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appellant, the purpose of granting incentive is clearly only to provide an incentive for establishment of new industries in the undeveloped regions or to expand its existing units of the State of Maharashtra. The variation in methodology of availment of various incentives under the scheme will not alter the character of receipt being capital in nature. The ratio laid down by the various binding judicial pronouncements discussed hereinabove squarely applies to the facts of the case. Respectfully following the same, I hold that the amount received by the appellant during the year under consideration as promotional subsidy under the PSI of Maharashtra in the capital field and not liable to tax. In view of the above facts, the action of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed before us. The issue has been dealt with by the ITAT, Nagpur Bench in so many cases, including the assessee s own cases in ITA Nos. 179 to 183/Nag/2007, covering assessment years 1999-2000, 2002-03 to 2005-06, wherein it was held as under : It is clear before us that the scheme is for establishing the industries in undeveloped and underdeveloped districts of Maharashtra . State. The sales tax incentive is one of the incentive granted under the scheme. The implementation of the scheme is within purview of Government of Maharashtra and competent authority issues necessary eligibility certificate. It is admitted fact that the sales tax incentives were paid to the assessee as per eligibility certificate issued by the competent authori ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rted in ~8 ITR 273 (Mumj(SB), and other orders of the Ld. Bench ojlTAT, Nagpur in.ITA No. 191/Nag/Ol etc. order dated 20.2.04, ITA No. 137/Nag/99 order dated 22.7.2003, ITA No. 107/Nag/06 order dated 11.8.06, and in ITA No. 416/Nag/2001; 239/Nag/02, 7 and 8/Nag/2002, 107/Nag/06 order dated 11.8.2006 which are binding on the Bench to follow and Calcuttq. Benr;h, order . in Maiihari Alloys Ltd. Ambuja Cement, we are of the opinion that the sales tax incentives are in the nature of capital subsidy, It is incentive for setting up of industries in undeveloped Underdeveloped districts of Ma harashtra State . 8. The ITAT in assessee's own cases have held that sales tax incentive is capital receipt and therefore, not taxable. 9. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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