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TMI Blog2018 (9) TMI 1011X X X X Extracts X X X X X X X X Extracts X X X X ..... dgment of Hon'ble Supreme Court in the case of Meghalaya Steels Ltd. (supra) squarely covers the issues involved. Thus, we find no need for making interference in the order passed by Ld. CIT(A) wherein claim made by the assessee was allowed by Ld. CIT(A) - Decided against revenue - ITA No. 47/Mum/2016 - - - Dated:- 4-9-2018 - Sri Mahavir Singh, JM And Sri Ramit Kochar, AM For the Appellant : Shri SK Mitra, DR For the Respondent : Shri Sunil Kumar Shri Gagandeep Singh, ARs ORDER PER MAHAVIR SINGH, JM: This appeal filed by the Revenue is arising out of the order of Commissioner of Income Tax (Appeals)-16, Mumbai [in short CIT(A)], in appeal No. CIT(A)-16/ITO-8(1)(2)/IT-14/2014-15, dated 28.10.2015. The Assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Unmesh M. Joshi (ITA No. 4287/Mum/2010 dated 23.12.11), on the subject. 3. Briefly stated facts are that the assessee company is engaged in the business of manufacturing of cotton yarns and having its manufacturing unit at plot No. 9, section 9 SIDUL, Pantnagar, Rudrapur 263153, Uttarakhand. The AO noticed during the course of assessment proceedings that as per schedule 22 of the profit and loss account the assessee has received a subsidy from TUFS on interest paid of ₹ 2,13,26,706/- and claimed the same as deduction under section 80IC of the Act. According to AO, this interest need to be included in the profit and loss accounts of the undertaking or enterprises and hence, in term of section 80IC(1) of the Act this interest su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... apatly clear that that the said amount was not in the nature of any income to the assessee company and the same was merely reimbursement/ refund out of the actual interest paid by the assessee to the banks which was according to the scheme of the Ministry of Textiles. In view of all the facts narrated above, merit of the case and decision of my predecessor in earlier AY appeal of the assessee is allowed and disallowance of amount of ₹ 2,13,26,706/- made by the AO is disallowed. Aggrieved, now Revenue is in appeal before Tribunal. 4. After hearing both the sides and going through the facts and circumstances of the case, we find that this issue is squarely covered by the decision of Hon ble Supreme Court in the case of CIT vs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thereafter receives back 5% reimbursement of such interest paid by it to the Bank. Thus the said receipt of interest reimbursement has direct, live link and first degree nexus with the expenses of Industrial Undertaking and has effect of reducing the operational cost of the Undertaking. The Assessee has, merely for the control purpose, shown the said interest reimbursement separately in credit side of the Profit Loss Account. I had the Assessee adopted the alternative method of accounting, whereby the reimbursement of expenses are credited to/reduced from the particular expenses head, there would have been no' surplus/credit balance under any accounting head. It was further, submitted that the said method of accounting is recognized ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) and CIT v Eastern Electro Chemical Industries [1999]. Thus that the judgment cited in 356 ITR 235 relied, upon by the Assessee as supra has considered all earlier judgments and given the finality on the issue involved. It was, therefore, submitted that the amount of interest.- reimbursement amounting to ₹ 1,34,45,475/- should not be excluded while amounting deduction u/s 80-IC and the same. be. allowed to the Assessee in full. 7. Ld. CIT(A) considered the submissions of the assessee and found that this issue was covered in favour of the assessee in view of the judgments of Hon'ble Gauhati High Court in the case of CIT Vs. Meghalaya Steels Vs. and Pride Coke Pvt. Ltd. 356 ITR 235 (Gauhati), and thus he allowed the claim of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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