Priya Soparkar 1 12 itxa 1587 16 o IN HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO.1587 OF 2016 Commissioner of Income Tax LTU Appellant V/s. M/s Indian Petrochemicals Corporation Ltd. Respondent Mr.Tejveer Singh for Appellant. Mr.Jehangir Mistri, Senior Counsel with Mr.P.C.Tripathi with Mr. Amit K. Mathur i/by Mr.Raj Daraka for Respondent. CORAM : AKIL KURESHI AND M.S.SANKLECHA, JJ. DATE : FEBRUARY 18, 2019. P.C.: 1. This appeal is filed by revenue raising following question for our consideration: 1. Whether, on facts and in circumstances of case and in law, ITAT was right in holding that notional sales tax exemption amount of Rs.85,97,07,481/ is capital receipt not liable to Income tax? 2. Whether on facts and in circumstances of case and in law, Tribunal was right in deleting addition made by AO by disallowing deduction u/s 80IA of Rs.86,51,99,227/ claimed by assessee? ::: Uploaded on - 20/02/2019 ::: Downloaded on - 21/02/2019 09:36:26 ::: Priya Soparkar 2 12 itxa 1587 16 o 2. Respondent assessee is registered company. For assessment year 2006 07, assessee had filed return of income. Question No.1 raised by revenue relates to assessee's claim of sum of Rs.85.97 crores (rounded off) received by way of sales tax exemption scheme of Government of Gujarat and Government of Uttar Pradesh in relation to assessee's three different projects. assessee contended that receipt was capital in nature as against revenue's contention that sales tax exemption/waiver resulted into revenue receipts in hands of assessee. Commissioner of Income Tax in Appellate Order after detailed discussion held that receipts were capital in nature. In so far as receipts arising out of sales tax exemption scheme of State of Gujarat is concerned, we find that issue is no longer res integra. Gujarat High Court in case of Commissioner of Income Tax 1 Vs. Indian Petrochemicals Corporation Ltd., Income Tax Appeal No.1773 of 2018 and connected appeal by judgment dated 19th July, 2016 while dismissing revenue's appeal, in this context made following observations : ::: Uploaded on - 20/02/2019 ::: Downloaded on - 21/02/2019 09:36:26 ::: Priya Soparkar 3 12 itxa 1587 16 o 5. We have heard both learned counsel and perused record. We have also gone through decisions cited before us. After considering material on record, we are of view that issues involved in this appeal are squarely covered by decisions of Apex Court in cases of Ponni Sugars and Chemicals Ltd. (supra), Meghalaya Steels Ltd. (supra), Sri Venkata Satyanarayana Rice Mill Contractors Co.(supra), Ajanta Pharma Ltd.(supra) and decisions of this Court in Tax Appeal No.226 of 2010, Tax Appeal No.77 of 2008, Sarabhai M.Chemicals (P.) Ltd. (supra). Learned advocate for revenue is not in position to controvert law laid down in aforesaid decisions. Therefore, questions of law posed for our consideration in these appeals are answered in favour of assessee and against revenue. Accordingly appeal is dismissed. 3. We may notice that similar issue came up before this Court in case of Commissioner of Income Tax LTU Vs. M/s. Indian Petrochemicals Corporation Limited reported in Income Tax Appeal No.1428 of 2016. Following decision of Gujarat High Court in above noted decision revenue's appeal was dismissed. 4. Learned counsel Shri Mistri for respondent assessee however fairly pointed out that in present case asssessee's ::: Uploaded on - 20/02/2019 ::: Downloaded on - 21/02/2019 09:36:26 ::: Priya Soparkar 4 12 itxa 1587 16 o claim arose out of two more receipts both under sales tax exemption scheme of Government of Uttar Pradesh. We notice that this issue has been elaborately discussed by Commissioner (Appeals). He took note of various terms of scheme of State of Uttar Pradesh and noted that depending on location of units of eligible assessees, sales tax exemption was granted in terms of percentage of capital investment. scheme itself was founded on basis of attracting capital investments in certain backward areas. That bring position, scheme of Utter Pradesh which came up for consideration before CIT (appeals) and Tribunal in present case is substantially similar. Though obviously cannot be identical to sales tax exemption scheme of Government of Gujarat which was examined in case of M/s. Indian Petrochemicals Corporation Limited (supra). Under circumstances, first question raised by revenue is not entertained. 5. In so far as third question is concerned, undisputedly issue is covered by decision of this Court in case of ::: Uploaded on - 20/02/2019 ::: Downloaded on - 21/02/2019 09:36:26 ::: Priya Soparkar 5 12 itxa 1587 16 o Commissioner of Income Tax LTU Vs. M/s Reliance Industries Ltd. reported in Income Tax Appeal No.1056 of 2016. revenue's appeal was dismissed on this ground making following observations: 7. Counsel for assessee pointed out that judgment of Tribunal in case of Reliance Infrastructure limited(supra) was carried in appeal by revenue before High Court in Income Tax Appeal No.2180 of 2011, such appeal was dismissed making following observations: 6. As far as question (d), namely, claim relating to purchase price from Tata Power Company is concerned and that was for deduction under Section 80IA, ITAT in paragraph 21 onwards has noted factual findings and also referred to order of Maharashtra Electricity Regulatory Authority (for short MERC ). Paragraph 36 set outs as to how claim arose. claim has been considered in light of Section 80IA and particularly proviso and explanation thereto. Tribunal eventually held that till Assessment Year 2005 2006, Revenue considered rate at which power was purchased by Assessee from Tata Power Company as market value. There is nothing brought on record as to how rate determined by MERC is true market value. Assessee gave explanation that rates determined by MERC do not reflect correct market rate. finding is that mode of computation and deduction under Section 80IA requires no deviation from past. findings of fact and to be found in paragraphs 42 to 50 also reflect that very ::: Uploaded on - 20/02/2019 ::: Downloaded on - 21/02/2019 09:36:26 ::: Priya Soparkar 6 12 itxa 1587 16 o issue came up for consideration for Assessment Year 2003 2004. For reasons assigned by ITAT and finding that attempt is to seek reappreciation and reappraisal of factual data that we come to conclusion that even question (d) as framed is not substantial question of law. 8. Thus, issue at hand had been examined by this Court on earlier occasion and view of Tribunal under similar circumstances was approved. 6. In result, Income Tax Appeal is dismissed. (M.S.SANKLECHA,J.) (AKIL KURESHI,J.) . ::: Uploaded on - 20/02/2019 ::: Downloaded on - 21/02/2019 09:36:26 ::: Commissioner of Income-tax-LTU v. Indian Petrochemicals Corporation Ltd