Calcutta High Court
Principal Commr. Of Income Tax vs M/S. Bharat Hitech Cement Pvt. Ltd on 11 May, 2018
Author: Sanjib Banerjee
Bench: Sanjib Banerjee
OD-50
(8/5/2018)
GA No.2835 of 2016
ITAT No.373 of 2016
IN THE HIGH COURT AT CALCUTTA
Special Jurisdiction (Income Tax)
ORIGINAL SIDE
PRINCIPAL COMMR. OF INCOME TAX-1, KOLKATA
Versus
M/S. BHARAT HITECH CEMENT PVT. LTD.
BEFORE:
The Hon'ble JUSTICE SANJIB BANERJEE
The Hon'ble JUSTICE ABHIJIT GANGOPADHYAY Date : 11th May, 2018.
Appearance:
Mr. Prithu Dudheria, Adv.
Mr. J. P. Khaitan, Sr. Adv.
Mr. S. Bagaria, Adv.
Mr. Agnibesh Sengupta, Adv.
Mr. Niloy Sengupta, Adv.
The Court: Two questions are sought to be raised by the Revenue in this appeal from an order dated January 6, 2016 passed by the Appellate Tribunal. The first pertains to the order of remand in respect of a substantial amount received in the relevant financial year by the assessee on account of share application money and the other pertains to the treatment of the subsidy 2 obtained by the assessee from the State Government and as to whether it ought to be regarded as a capital receipt or a revenue receipt.
As to the first issue raised by the Revenue, no prejudice has been occasioned to it and, since all of the records may not have been before the Assessing Officer, the Appellate Tribunal deemed it fit for the documents relied upon in support of the share application money to be looked into afresh by the Assessing Officer. Surely, it will be open to the Revenue to assert before the Assessing Officer that since the relevant records were not produced at the time of assessment, the Assessing Officer has to look at the documents far more strictly. There does not appear to be any seriousness in the question. In any event, it was within the authority of the Appellate Tribunal to remand one aspect of the matter for fresh consideration upon noticing that the evidence in respect of such issue may not have been there before the Assessing Authority.
As to the second aspect canvassed by the Revenue, it appears from paragraph 4.3 of the order impugned herein that the Government of West Bengal provided a capital subsidy amounting to Rs.27,76,460/- towards incentive for installing pollution control devices. Supplies were obtained by the assessee from one Pronto Commercial Private Limited for setting up a manufacturing unit in a backward district. The Tribunal recorded that there was no dispute that a cement manufacturing plant was set up by the assessee in a backward district. The Tribunal also found, as a matter of fact, that by a letter dated May 2, 2007, issued by the Directorate of Cottage and Small Scale Industries, Purulia to a bank, the Directorate advised the bank to credit the entirety of the subsidy to the 3 account of Pronto Commercial Private Limited whose account was also maintained with the same branch.
It also appears that the assessee had sought a lower deduction on the cost of the capital asset upon receiving the subsidy. Clearly, on the basis of the facts as established, the subsidy had to be regarded as a capital receipt and not a revenue receipt.
In view of the above, ITAT No.373 of 2016 and GA No.2835 of 2016 are disposed of without interfering with the order of the Appellate Tribunal.
There will be no order as to costs.
(SANJIB BANERJEE, J.) (ABHIJIT GANGOPADHYAY, J.) bp.