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TMI Blog2020 (10) TMI 242X X X X Extracts X X X X X X X X Extracts X X X X ..... f Octroi refund is revenue in nature in the facts and circumstances of the case. 3. The brief facts relating to the issue on hand are that the assessee is a company and is engaged in the business of manufacturing of connecting rods and automobile components. The assessee conducts its business under the name and style of "M/s. Fortuna Engineering Pvt. Ltd." The assessee received an amount of Rs. 1,33,41,000/- as Octroi Duty refund and claimed the said subsidy granted by the Government of Maharashtra as per the scheme of PSI-2007 Scheme to set up plant or development of plant in backward areas. The AO treated the same as revenue in nature and added the same to the total income of assessee vide this order dated 03-11-2016 u/s. 143(3) of the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aterial, the said subsidy is to be treated on capital account is the same is granted for setting up a new unit to expand the existing unit. He also referred to the decision of Hon‟ble Supreme Court in the case of CIT Vs. Chaphalkar Brothers, Pune reported in 400 ITR 279 (SC) and submitted the Hon‟ble Supreme Court upheld the decision of Hon‟ble High Court of Bombay. He prayed to set aside the order of CIT(A) by holding the subsidy granted to the assessee is in the capital in nature. 5. The ld. DR, Shri Dhananjay Mahajan submitted by referring to para 5.10 of CIT(A), that the subsidy has been granted to the assessee for carrying on the business during the course of trading and the question of subsidy is to be treated as re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to set up a new unit or to expand the existing unit then the receipt should be treated as capital account. We note that the Hon‟ble High Court of Bombay in order to reach said conclusion placed reliance on the decision of Hon‟ble Supreme Court in the cases of Ponni Sugar & Chemicals Ltd., 306 ITR 392 and Sahney Steel & Press Works Ltd., 228 ITR 253. Having aggrieved before the Hon‟ble High Court of Bombay the Department of Revenue carried the matter to the file of Hon‟ble Supreme Court challenging the decision of Hon‟ble High Court of Bombay in the case of Chaphalkar Brothers (supra). The Hon‟ble Supreme Court dealt the issue in detail and held if the object of subsidy is to industrialize the State and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t up such highly capital intensive entertainment centers. This being the case, it is difficult to accept Mr. Narasimha's argument that it is only the immediate object and not the larger object which must be kept in mind in that the subsidy scheme kicks in only post construction, that is when cinema tickets are actually sold. We hasten to add that the object of the scheme is only one -there is no larger or immediate object. That the object is carried out in a particular manner is irrelevant, as has been held in both Ponni Sugar and Sahney Steel. 23. Mr. Ganesh, learned Senior Counsel, also sought to rely upon a judgment of the Jammu and Kashmir High Court in Shri Balaji Alloys vs. C.I.T. (2011) 333 I.T.R. 335. While considering the sc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 26. In coming to the West Bengal cases, we find that the West Bengal Finance Act, 2003 which amended the Bengal Amusements Tax Act of 1922 also provided: The Bengal Amusements Tax Act, 1922. The provision seeks to provide, in order to encourage development of multiplex theatre complex, a very modern and highly capital-intensive entertainment centre, financial assistance to the proprietors of such complex by allowing them to retain, by way of subsidy, the amount of entertainment tax collected against the value of ticket for admission to such multiplex theatre complex for a period not exceeding four years; 27. Since the subsidy scheme in the West Bengal case is similar to the scheme in the Maharashtra case being to encourage develop ..... X X X X Extracts X X X X X X X X Extracts X X X X
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