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M/S. Patankar Wind Farm Pvt. Ltd.,, ... vs Deputy Commissioner Of Income-Tax,, on 22 December, 2017
cites
Cit vs M/S Meghalaya Steels Ltd on 9 March, 2016
"24. Another reliance placed upon by the learned Authorized Representative
for the assessee was on the ratio laid down by Hon'ble Gauhati High Court
in CIT Vs. Meghalaya Steels Ltd. (supra), wherein the Hon'ble High Court
held that the transport subsidy, power subsidy, interest subsidy and
insurance subsidy reduced the cost of production of an industrial
undertaking and since there was first degree nexus between the said
subsidies and the profits and gains derived by an industrial undertaking,
therefore, it was entitled to the deduction under section 80IB / 80IC of the
Act in respect of the said subsidies so received. The proposition propounded
by the Hon'ble Gauhati High Court in the said case was that the subsidies
received by the assessee were inter-linked and had direct nexus with the
manufacturing activities of the industrial undertaking and had reduced the
cost of production of the said undertaking and hence, there was nexus
between the said subsidies and profits and gains derived by the industrial
undertaking and hence, the same were held to be eligible for deduction
under section 80IB / 80IC of the Act. However, in the facts of the case before
us, the assessee is in receipt of sales tax subsidy, which undoubtedly, is a
revenue receipt in the hands of the assessee, but the said subsidy does not
14
ITA Nos. 1362/PUN/2011, 2389/PUN/2012, 169 & 170/PUN/2016
in any manner reduce the cost of production of industrial undertaking. It is a
benefit given to the industrial undertaking for establishing the wind energy
generation units in the State of Maharashtra, but the same does not have a
direct nexus between the subsidy on the one hand and the manufacturing
activity of the industrial undertaking on the other hand. In the absence of a
direct and first degree nexus between the subsidy on the one hand and
profits of the industrial undertaking on the other hand, where such subsidy
does not reduce the cost of production, we hold that the sales tax subsidy
received by the assessee is not eligible to the deduction under section 80IA of
the Act. The sales tax subsidy received by the assessee is an Incentive
subsidy and is not an operational subsidy and consequently, does not affect
profits of the business and is not linked to the profits of industrial
undertaking and hence, is not deductible in terms of provisions of section
80IA of the Act."
M/S. Patankar Wind Farm Pvt. Ltd.,, vs Department Of Income Tax on 31 October, 2014
The Tribunal in the case of M/s. Patankar Wind Farm Pvt. Ltd. Vs.
Dy. Commissioner of Income Tax (supra) has held that Sales Tax subsidy is
not an operational subsidy and is not linked to the profits of industrial
undertaking. The scheme under which the present assessee has received
Sales Tax subsidy is same, therefore, there is no reason to take a different
view.
Garden Silk Mills Ltd. vs Dy Commissioner Of Income Tax ... on 30 November, 2005
Since, facts in present
case are distinguishable, the ratio laid down in Garden Silk Mills Vs.
Commissioner of Income Tax and Another (supra) would not apply.
Section 80IC in The Income Tax Act, 1961 [Entire Act]
Section 80IB in The Income Tax Act, 1961 [Entire Act]
Rupinder Singh Arora, Mumbai vs Ito 6(1)(2), Mumbai on 10 February, 2017
16. The ld. AR has drawn our attention to the decision of Mumbai Bench
of the Tribunal in the case of Rupinder Singh Arora Vs. ITO (supra).
Commnr. Of Income Tax, Madras vs M/S. Ponni Sugars & Chemicals Ltd on 16 September, 2008
The „purpose test‟ as expounded by Hon‟ble Apex Court
in the case of Commissioner of Income Tax Vs. Ponni Sugars & Chemicals
Ltd. & Ors. (supra) has to be applied to determine the nature of subsidy.
Commissioner Of Income Tax-I, Kolhapur vs M/S Chaphalkar Brothers Pune on 7 December, 2017
Similarly, in the cases of Commissioner of Income Tax Vs.
Chaphalkar Brothers (supra) and DCIT Vs. Inox Leisure Ltd. (supra)
entertainment subsidy/exemption of sales tax as subsidy was given to
promote construction of multiplex theatres. The subsidy was given to
recoup capital investment and thus, was held to be capital receipt. Since,
the facts of the above referred cases are entirely different, they would not in
any manner support the connections of the assessee.
Alpeshbhai Rasiklal Lakhani (Huf),, ... vs Dy. Commissioner Of Income ... on 14 November, 2017
10. The Co-ordinate Bench of the Tribunal in the case of Rasiklal M.
Dhariwal (HUF) Vs. Dy. Commissioner of Income Tax (supra) had occasion
to consider the nature of subsidy received in the form of sales tax incentive
for generation of power in the State of Maharashtra. The Tribunal after
analyzing the scheme of subsidy threadbare concluded that the subsidy
received under the scheme is revenue receipt. The relevant extract of the
findings of Tribunal on this issue are as under :