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TMI Blog2023 (2) TMI 197X X X X Extracts X X X X X X X X Extracts X X X X ..... entive. 2. Whether the CIT(A) erred on the facts and in the circumstances of the case and in law, in holding that Sales Tax was embedded in the Sales prices charged by the assessee and the same was in the nature of capital receipt. The Ld. CIT(A) ignored the fact that the assessee was legally required to collect Sales Tax on the Sales made, yet it had worked out the notional Sales Tax so collected and had claimed the same as capital receipts. 3. Whether the CIT(A) erred on the facts and in the circumstances of the case and in law, in relying on the decision of ITAT, Mumbai and the decision of Bombay High Court (ITA No. 1299 of 2008) in the case of Reliance Industries Limited, even though subsequent to the Departmental appeal against the Order of High Court, the issue has been remitted back to the Bombay High Court to decide afresh and the same is still pending for adjudication. 3. At the outset, the Ld. Counsel of the assessee submitted that issue-in-dispute raised by the Revenue is covered by the order of the ITAT for assessment year 2010-11 in ITA No. 7791 of 2019 and 554 of 2020. Therefore, he submitted that order of the Ld. CIT(A) on the issue-in-dispute might be upheld. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed, in view of the detailed discussion made by the AO in the assessment order passed u/s. 143(3) dated 23.12.2010" On perusal of the above paragraphs, it is clear that the AO did not compare the terms and conditions of the Sales Tax Incentive Scheme of 1979 availed by Reliance Industries Ltd. with the New Package Scheme of Incentives, 1993 which was availed by the appellant company. Thus, the directions of Hon'ble Mumbai ITAT as per order dated 15.09.2017 were not followed by the AO in the right earnest. The AO thereafter proceeded to make an addition of Rs. 5,37,44,724/- on account of Sale Tax Incentives as revenue receipts on the ground that the decision of Hon'ble Mumbai High Court in the case of Reliance industries Ltd. had not attained finality. 6.3 Here it is pertinent to mention that in appellant's own case, the Hon'ble ITAT for A.Y. 2003-04 has allowed the appeal on this issue holding sales tax incentive to be capital in nature. Further, the then CIT(A) has also allowed the appeals on this issue in favour of the appellant company for A.Y. 2007-08, 2008-09 and for A.Y. 2009-10 vide order dated 09.11.2012 and 31.03.2015 respectively. 6.4 Subsequently w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue is squarely covered by the decision of the Special Bench in the case of DCIT vs. Reliance Industries Ltd. (2004) 88 ITD 273 (Mum)(SB)." 4.1. The Ld. CIT(A) further referred to the finding of the Ld. CIT(A)-3, Nashik to support his finding. The Ld. CIT(A) after comparing the Maharashtra Incentive Scheme, 1979 with Maharashtra Incentive Scheme, 1993, followed the decision of the Tribunal for AY 2003-04 in ITA No. 814/M/2007 and his predecessor and held that the sale tax incentive received by the assessee under the "new package scheme 1993" is capital in nature. The Tribunal in ITA No. 7791 of 2019 and 534 of 2020 for assessment year 2010-11 has also mentioned the facts and scheme under consideration as follows: "9.1 On Grounds of appeal No. 1() to I(n) of the revenue ie, "Sales Tax Incentive under New Pension Scheme of Incentives (PSI), 1993. [Rs. 2,23,927341-1, the Learned Counsel for the Assessee drew the attention of the Bench with respect to the brief facts of the case are that the assessee company had set-up a manufacturing unit in backward area of Nashik, Maharashtra. The assessee company is having its manufacturing unit of Asbestos cement sheets and accessories at Lakhma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an appeal before the Hon'ble High Court of Bombay which is pending for adjudication. In this connection, it is relevant to state that the Hon'ble Supreme Court in the case of Union of India vs., Kamlakshi Finance Corporation Ltd., [1991] 55 ELT 433 (SC) has held that 'mere fact that the order of the appellate authority is not "acceptable" to the Department and is the subject matter of an appeal can furnish no ground for not following it unless its operation has been suspended by a competent court. We find that since the order of the Special Bench of the Tribunal is still holds the field and in absence of any contrary decision brought to our notice by the Ld. D.R., and the order of the Ld. CIT(A) in deleting the addition made by the A.O. is in accordance with law, we find no reason to interfere with the order of the Ld. CIT(A) on this issue and, therefore, we hold that the amount of incentive is not a revenue receipt, but, it is a capital receipt and, therefore, we direct the A.O. to delete the addition. The Revenue fails in its grounds of appeal Nos. 1(i) to 1(iv) and, therefore, the grounds on this issue are dismissed." 4.3. Since, the Tribunal (supra) has allowed th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ority of law and restored the Assessment Order u/s. 143(3) dated 28-03-2013. However, the ITAT has not decided on merits of allowability of these subsidy since that may lead to influencing the adjudication pending before the CIT(A). 2.1 Hence, the appeal was decided in the favour of the appeal and the order ws 263 dated 25-11-2013 is quashed. Therefore in the light of the aforesaid ITAT order, the present appeal filed before your goodself becomes infructuous." 6.2 While passing order of the CIT u/s. 263 the Hon'ble Tribunal, 'E' Bench. Mumbai in its Order dated 21.08.2019 has held as under: "29. Since in the present case the assessing officer has already analysed one aspect of the matter which was pending before the CIT(A), the matter cannot be again relooked by the Commissioner on any other aspect as the order of the assessing officer gets merged with the order of CIT(A) in view of the decision of the Hon'ble Bombay High Court as above. Thus, the Commissioner had no power to touch upon the issues of treatment of sales tax and excise duty incentives in the impugned proceedings us 263 of the Act. 30. We make it clear that since the matter on the issue of exci ..... X X X X Extracts X X X X X X X X Extracts X X X X
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