9911796707
TMI Blog2022 (10) TMI 938X X X X Extracts X X X X X X X X Extracts X X X X ..... Brief facts of the case are that the assessee is a domestic public company engaged in the business of export of frozen shrimp products filed it's return of income for the A.Y.2017-18 on 28.10.2017, declaring a total income of Rs.52,30,54,010/-. The case was selected for complete scrutiny under CASS and assessment u/s 143(3) of the Income Tax Act, 1961 (in short 'Act') was completed on 28.03.2019, determining total income of Rs. 52,59,11,453/-. Subsequently, vide proceedings u/s 263 of the Act, the Principal Commissioner of Income Tax (in short Pr.CIT), by order dated 29.03.2021, relying on the order of the Hon'ble Supreme Court in Liberty India Vs. CIT(SC) 317 ITR 218, directed the AO to redo the assessment on observing that an amount of R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a). 3. On being aggrieved, the revenue preferred appeal against the order of the Ld.CIT(A) before the Tribunal and raised the following grounds of appeal : (i) The Ld.CIT(A) erred in law and facts, in view of the subsequent decision of the Hon'ble Supreme Court in the case of M/s Meghalaya Steels Limited, the findings recorded by the authorities below based on the decision of Hon'ble Supreme Court in the case of M/s Liberty India cannot be held as sustainable. (ii) The Ld.CIT(A) erred in by relying on the decision of the Hon'ble ITAT, by its decision in the case of M/s Meghalaya Steels Limited, has overruled its earlier decision in the case of Liberty India, when in fact, no such observation either directly or remotely was made by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and dismiss the appeal of the revenue. 5. We have heard both the parties, perused the material placed on record and also the orders of the revenue authorities. It is known fact that the assessee preferred appeal against the consequential order passed by the AO u/s 143(3) r.w.s. 263 before Ld.CIT(A) and the Ld.CIT(A) after considering the submissions of the assessee, has rightly allowed the appeal of the assessee on merit and legal grounds, relying on the decision of the Tribunal in assessee's own case in ITA No.156/Viz/2021 dated 06.06.2022. For the sake of clarity and convenience, we extract relevant part of the order of the Ld.CIT(A), which reads as under : "3.3. During the appeal before the undersigned, it was submitted that aggrieve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ued that as the subsidies that are received by the respondent, would be income from other sources referable to Section 56 of the Income Tax Act, any deduction that is to be made, can only be made from income from other 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 f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment in the case of CIT vs. Sterling Foods [1999] 104 Taxman 204 and Liberty India (supra) to arrive at the opposite conclusion has held to be wrongly decided. We are therefore of the considered view that since the Hon'ble Supreme Court has overruled its earlier decision in the case of Liberty India (supra) the decision in the case of Meghalaya Steel Ltd (supra) holds good. Respectfully following the decision of the Hon'ble Apex Court in the case of Meghalaya Steel Ltd (supra), we hold that the export entitlements (MEIS) and the duty drawback of promotion scheme is an income asssessable under the head "profits or gains from business or profession" as per clause (iiib) and (iiid) to section 28 of the IT Act, 1961. In view of the above, the G ..... X X X X Extracts X X X X X X X X Extracts X X X X
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