9911796707
TMI Blog2022 (12) TMI 157X X X X Extracts X X X X X X X X Extracts X X X X ..... S credit in its Profit Loss account, since such credit for its nature as well as built-in conditions, could never have been an item on revenue account. Wherever it has made purchases of eligible capital goods however, it has corresponded with vendors as to availability of SFIS credit against Excise / Customs liability against the said purchases, obtained certificates from Excise / Customs authorities against provisional Invoices from vendors, and has purchased the said capital goods net of Excise / Customs duty, against SFIS credit. The capital goods as purchased have been brought into Assets at the net-of Excise / Customs value in the Balance Sheet. Details of utilization of SFIS credit during the year are are examined. Documents in r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Appeal of the assessee is allowed. - ITA No. 4320/Del/2019 And ITA No. 4199/Del/2019 - - - Dated:- 30-6-2022 - Dr. B. R. R. Kumar, Accountant Member And Sh. Yogesh Kumar US, Judicial Member For the Assessee : Sh. S. Krishnan, Adv. And Sh. V. Rajakumar, Adv. For the Revenue : None ORDER PER DR. B. R. R. KUMAR, ACCOUNTANT MEMBER: The present appeals have been filed by the assessee as well as the Revenue against the order of the ld. CIT(A)-2, New Delhi dated 31.12.2018. 2. In ITA No. 4320/Del/2019, following grounds have been raised by the assessee: i. In a sum of Rs.10.80 Cr. on account of Served from India Scheme Scrips treating the same as revenue income; ii. In a sum of Rs.32,184/- on account o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed for the purpose of business. Imports Allowed: Duty Credit scrip may be used for import of any capital goods including spares, office equipment and professional equipment, office furniture and consumables; that are otherwise freely importable and / or restricted under ITC (HS). Imports shall relate to any service sector business of applicant Non Transferability: Entitlement / goods (imported / procured) shall be non transferable (except within group company and managed hotels) and be subject to Actual User condition. d. In terms of Clause 3.12.8 of the SFIS, Duty Credit Scrips can also be used for payment of excise duty when purchases are m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re purchased. The Revenue erroneously held that the credit is not given for setting up of business or acquiring any capital assets. The Revenue authorities have erroneously assumed that only an entity setting up business needs to acquire capital assets. Given that SFIS gives a credit corresponding to 10% of foreign exchange reserves earned by a service business during the year which can only be availed by existing businesses. 10. The Revenue held that SFIS nowhere requires purchase of capital goods as mandatory requirement whereas the clause 3.12.6 of the SFIS specifically restricts duty credit scrips to usage for import of 'any capital goods including spared. Additional requirements at clause 3.12.7 as to non-transferability and ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... SFIS credit and its accounting are perused. The first 16 transactions are for purchase of rakes of 30 - 45 wagons, while last one is in respect of purchase of Slack less draw bar(SLDB), which is the joint between railway wagons. 14. Thus, the rake enters the Assessee s business and the Assessee s accounts as a fixed asset, and is capitalized at the cost of acquisition, i.e. Rs.9,79,49,291/-. All that the SFIS credit has done therefore, is to reduce the value of a capital asset brought into the books, by the amount of excise duty thereof. Had the SFIS credit not been included, the Assessee would have paid the duty and added the same to the asset cost while capitalizing the same. There is therefore no element of revenue or income in the S ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
