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TMI Blog2023 (5) TMI 690X X X X Extracts X X X X X X X X Extracts X X X X ..... pute Resolution Panel-2, Bengaluru, dated 22.09.2017 and pertains to assessment year 2013-14. 2. The assessee has raised the following grounds of appeal: "1. The order of the AO / DRP is contrary to law, facts and circumstances of the case. 2. Disallowance of subsidy receipt of Rs.84,00,000/- 2.1 The AO/DRP erred in confirming the action of the assessing officer in adding back to the total income the subsidy receipt of Rs.84,00,000/treating the same as a revenue receipt. 2.2 The AO / DRP ought to have appreciated the fact that the appellant had installed a 4.2 MW Biomass co-generation captive power plant(capitalized during the financial year 2008- 09) for captive use and the above capital subsidy has been sanctioned by Govt of Indi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... posited to the bank account. (Canara Bank v CIT 265 CTR 385 Kar 3.4 Without prejudice, the disallowance under this section should be restricted to 0.5% of the investment from which dividend has been earned and not on the entire investment as per Rule 8D(2)(iii). 3.5 The DRP / AO erred in confirming the disallowance of Rs. Rs.5,62, 106/under sec 14A read with Rule 8D while computing Book Profits under Section 115JB 4. Deduction u/s.80-IA may be granted in accordance with the provisions of the Act and the decision of the Jurisdictional High Court taking into account the initiate assessment year as 2011-12. 5. The appellant craves leave to file additional grounds at the time of hearing." 3. The brief facts of the case are that, the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 84 lakhs from the Government of India through Tamilnadu Energy Development Agency and such subsidy has been given for the purpose of implementation of program on 'Biomass Co-generation in Industries'. As per objectives of the scheme, the main objects of the program on Biomass Cogeneration (non-bagasse) in Industry are given, as per which the subsidy can be utilized for three purposes, including deployment of biomass co-generation systems, promote decentralized/distributed power generation through supply of surplus power to the grid and to create awareness of the potential and benefits of alternative modes of energy generation in industry. The assessee has received a sum of Rs. 84 lakhs subsidy from Tamilnadu Energy Development Agency towa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 525 of 2021 dated 25.11.2021 4. DCIT vs Haldex India Pvt Ltd - ITA No. 852/Pune/2019 dasted 19.05.2022 5. CIT vs GLoster Jute Mills Ltd 0 416 ITR 458 (Cal) 6. Deepak Spinners Ltd vs DCIT - ITA No. 2055/Kol/2018 dated 12.06.2018. 6. The ld. Senior AR, P. Sajit Kumar, JCIT, supporting the order of the DRP submitted that, in order to decide the nature of subsidy, whether it is capital or revenue the object of the subsidy scheme is to be seen. Further, if subsidy is given to the tax payer to run the business more profitably or reimburse the costs incurred in running the business, then subsidy shall qualify as taxable revenue receipt. On the other hand, if the object of the subsidy is to enable the tax payer to set up a new unit, then as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ration system in industries for meeting their captive thermal and electrical energy requirement with supply of surplus power to the grid. Further, as per objectives of the scheme, the subsidy can be utilized for the purpose of deployment of biomass co-generation system in industry, promote decentralized/distributed power generation, conserve the use of fossil fuels for captive requirements and to create awareness about the potential and benefits of alternative modes of energy generation in industry. As per the scheme, subsidy can be utilized either for setting up of new biomass cogeneration system or to promote the existing system and its benefits. In the present case, the assessee has set up 4.2 megavolts captive power plant with a cost of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctual cost of plant and machinery installed in the plant for claiming depreciation. Therefore, we direct the Assessing Officer to treat subsidy received from Government of India as capital receipts and also reduce from cost of asset acquired out of said subsidy and allow depreciation as per law. 9. The next issue that came up for our consideration from ground no. 3 of assessee's appeal is additions towards disallowance u/s. 14A r.w.r. 8D of the I.T. Rules, 1962 to book profit computed u/s. 115JB of the Act. The ld. Counsel for the assessee, submitted that this issue is covered in favour of the assessee by the decision of the ITAT Special Bench in the case of ACIT vs Vireet Investments Pvt Ltd [2017] 82 Taxmann.com 415, where it has been he ..... X X X X Extracts X X X X X X X X Extracts X X X X
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