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TMI Blog2021 (4) TMI 1153X X X X Extracts X X X X X X X X Extracts X X X X ..... o. 1 to 1.3 was not adjudicated. These grounds of appeal are reproduced as under: 1. In law and in the facts and circumstances of the appellant's case, the Ld. CIT(A) has erred in not admitting the additional grounds raised by the appellant during the course of appellate proceedings and not reducing taxable income by interest subsidy of Rs. 5,77,14,810/- and Rs. 20,39,344/- received by the appellant under Technology Upgradation Fund Scheme (TUFS) for Textile and Jute Industries. 1.1 In law and in the facts and circumstances of the appellant's case, the Ld. CIT(A), while not admitting the additional grounds raised by appellant, has erred in stating that decision of Supreme Court in case of NTPC [229 ITR 383] is not applicable in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pellant and alleged interest income is required to be reduced from taxable income. 3. It is mentioned in the Miscellaneous Application that it was contended before the ITAT that these three grounds of appeal are duly covered by assessee's own case for A.Y. 2012-13 by the order of the ITAT, Ahmedabad vide ITA No. 1843/Ahd/2016. 4. Heard both the sides and perused the material available on record. It is noticed that the appeal of the assesse was adjudicated vide ITA No. 2316/Ahd/2018 on 24.11.2020. During the year under consideration in the case of the assesse MAT was levied on the basis of book profit u/s 115JB of the act therefore the additional ground of the assesse for reducing the amount of subsidy from the book profit while computing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be disposed in same manner as an appeal. Even where the appeal is withdrawn or dismissed for default, cross objection may nevertheless be heard and determined. Cross objection is nothing but an appeal, a cross appeal at that. This apart, raising of additional ground would only enable the authority concern to correctly assess the tax liability of the assessee. Similar view has been expressed by the co-ordinate bench in the case of ITO vs. Jasjit Singh (Del) in cross objection Nos. 138 to 142/Del/2014 interim order dated 23.09.2014. We thus do not see any impediment in entertaining the additional grounds. The relevant facts are available on record. 21.6 In so far as the merits of the claim made in additional ground is concerned, we obser ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sustain and prove the competitiveness and for long term viability of textile industry. The concerned ministry of textile adopted TUFS scheme envisaging technology upgradation of the industry as per the scheme. The object of the scheme w as to enhance sustainable growth in value chain for overall growth of textile industry. Pursuant to TUFS, certain subsidy benefits by way of interest on reimbursement of loans taken from authorized agencies f or investment in plant and machinery for spinning units and other machineries in textile industry was availed by textile sector. 11.3 In this background, it was contended on behalf of the assessee that the assessee herein as obtained subsidy by way of reimbursement of interest under the scheme. The a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ann.com 158 (SC) and CIT vs. Sham Lal Bansal [2011] 11 taxma nn.com 369 (P&H). In the light of aforesaid judgments, we find merit in the plea of the assessee that having regard to the object and purposes of the scheme, the interest subsidy is required to be treated as capital receipt of non-taxable nature having regard to the propositions laid down in the judicial proceedings noted above. 13. The aforesa id view is also fortified by the legislature in view of amendment as per sub clause (xviii) to Section 2(24) of the IT Act as inserted b y the Finance Act, 2015 which reads as under: "[xviii) assistance in the form of a subsidy or grant or cash incentive or duty drawback or waiver or concession or reimbursement (by whatever name called) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of our observations and shall exclude the subsidy from the ambit of taxation on being satisfied about the factual correctness on quantum of such subsidy. 6. After considering the decision of the Co-ordinate Bench on the identical issue on similar facts as elaborated above for A.Y. 2012-13 in the case of assesse itself, we consider that issue raised in grounds no. 1 to 1.3 as above covered in favour of the assesse after following the decision of Co-ordinate Bench as supra that the interest subsidy is required to be treated as capital receipt of non-taxable nature. Therefore, similar to the direction laid down by the Co-ordinate Bench for A.Y. 2012-13, we restore this issue to the file of the A.O. for verification and to exclude the subsidy ..... X X X X Extracts X X X X X X X X Extracts X X X X
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