COMMISSIONER OF INCOME TAX Vs. BIRLA VXL LTD.

JUDGEMENT

(1.) These Tax Appeals filed by the Revenue arise out of the common background. We may notice facts as arising in Tax Appeal No. 316 of 2012. For the Assessment Year 1991-92, Revenue challenged the judgment and order of the Income Tax Appellate Tribunal dated 4th November 2011. Following question has been presented for our consideration:-

(2.) The respondent-assessee had received incentives under the scheme framed by the Government of Gujarat under resolution dated 2nd January 1991 in the form of Sales Tax Waiver/Deferment scheme. For the A.Y. 1991-92, the assessee had received sales tax exemption of Rs. 3,09,40,235/=. Similar sales tax exemptions of varying amounts were received for the subsequent assessment years i.e., AY 1992-93 and 1993-94 also. Such incentives, according to the assessee, were in the nature of capital receipts. The Assessing Officer, however, did not accept such contention and held that the same was revenue in nature. The assessee carried the matter in appeal. CIT [A] by his order dated 28th March 2011, reversed the view of the Assessing Officer. He held that the purpose of incentives was clearly for promoting capital investment and thereby to achieve industrial development and therefore, incentive was in the nature of capital receipt. He relied on the decision of the Apex Court in case of CIT v. Ponni Sugars & Chemicals Limited, 2008 306 ITR 392.

(3.) Revenue carried the matter in appeal before the Tribunal. The Tribunal, dismissed the Revenue's appeal by judgment dated 4th November 2011. The Tribunal relied on the decision in case of Ajanta Manufacturing Limited v. CIT [ITA No. 793/RJT/2010]. The Revenue is thereupon before us in the present Tax Appeals.