Gujarat High Court
Commissioner vs Union on 14 June, 2011
Author: Akil Kureshi
Bench: Akil Kureshi
Gujarat High Court Case Information System
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O/TAXAP/100/2010
ORDER
IN
THE HIGH COURT OF GUJARAT AT AHMEDABAD
TAX
APPEAL No. 100 of 2010
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COMMISSIONER
OF INCOME TAX-IV....Appellant(s)
Versus
UNION
LTD.....Opponent(s)
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Appearance:
Mr.
Manish R Bhatt Sr Advocate with Mrs MAUNA M BHATT for the Appellant
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CORAM
:
HONOURABLE
MR.JUSTICE AKIL KURESHI
and
HONOURABLE
MS JUSTICE SONIA GOKANI 14th June 2011
ORAL
ORDER (PER : HONOURABLE MR.JUSTICE AKIL KURESHI)
Revenue is in Appeal against the judgment of the Income Tax Appellate Tribunal, Ahmedabad Bench [hereinafter referred to as, the Tribunal ] dated 18th September 2009 raising following questions for our consideration :-
{A} Whether the Appellate Tribunal is right in law and on facts in directing the Assessing Officer to treat the amount of Rs. 71,98,529/= as capital receipt ?
{B} Whether the Appellate Tribunal is right in law and on facts in directing the Assessing Officer to allow the depreciation of Rs. 28,82,664/= ?
The issue pertains to treating an amount of Rs. 71,98,529/= received by the assessee-Banaskantha District Cooperative Milk Producers' Union Limited by way of grant from the National Dairy Development Board [hereinafter referred to as, the NDDB ]. The Revenue contended that such receipt is in the nature of revenue receipt . The assessee on the other hand contended that such receipt is capital in nature. The Tribunal, in the impugned judgment, upheld the view of the CIT [A] and dismissed the Revenue's appeal relying on a similar issue decided by the Tribunal by its judgment dated 26th September 2006 in the case of Gujarat Cooperative Milk Marketing Federation Limited. The Tribunal noted that in the previous judgment, under the similar circumstances, the grant received by the assessee concerned from NDDB was treated as a capital receipt. The Tribunal reproduced portion of the previous judgment in which it is observed that in the agreement between the NDDB and the assessee it was provided that NDDB had an option either to give grant by way of cash or provide specific machinery or equipments required for the project and in such a case, the actual cost of the plant, equipments or machinery will be considered towards the grant for the purpose of agreement and such actual cost will be the amount as computed by the NDDB. It was further observed that the assessee was given cash grant instead of being given in the form of machinery. Such grant in cash was given for the project as a whole. The CIT [A], therefore, was right in observing that the grant was not for purchase of any specific plant or machinery or acquisition of assets but was given for the entire project.
We find that the above mentioned judgment of the Tribunal dated 26th September 2006 in the case of Gujarat Cooperative Milk Marketing Federation Limited has not been carried in appeal by the Revenue. Quite apart from that, we find that the issue has been properly examined and correctly decided by the Tribunal on the basis of the facts on record. In that view of the matter, we do not find any infirmity in the order of the Tribunal. Question No. A, therefore, pertaining to receipt of grant from NDDB is concerned, the same does not give rise to any question. The Question No. B being consequential to the first question, we do not find any merit in it. Accordingly, the Appeal fails and is dismissed.
(Akil Kureshi, J.) (Ms. Sonia Gokani, J.) Prakash* Page 4 of 3 Top