Delhi High Court
Sunbeam Auto Private Limited vs Pr. Commissioner Of Income Tax on 7 December, 2017
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* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ WP (C) 8941/2015
Reserved on: 11th November 2017
Decided on: 7th December, 2017
SUNBEAM AUTO PRIVATE LIMITED ....Petitioner
Through: Mr. Mayank Nagi with Mr. Vikrant
A. Maheshwari, Advocates.
versus
PR. COMMISSIONER OF INCOME TAX ..... Respondent
Through : Mr. Ruchir Bhatia, Senior standing
counsel.
WITH
+ WP (C) 8943/2015
SUNBEAM AUTO PRIVATE LIMITED ....Petitioner
Through: Mr. Mayank Nagi with Mr. Vikrant
A. Maheshwari, Advocates.
versus
PR. COMMISSIONER OF INCOME TAX ..... Respondent
Through : Mr. Ruchir Bhatia, Senior standing
counsel.
WITH
+ WP (C) 8996/2015
SUNBEAM AUTO PRIVATE LIMITED ....Petitioner
Through: Mr. Mayank Nagi with Mr. Vikrant
WP (C) 8941/2015 & connected Page 1 of 4
A. Maheshwari, Advocates.
versus
PR. COMMISSIONER OF INCOME TAX ..... Respondent
Through : Mr. Ruchir Bhatia, Senior standing
counsel.
AND
+ WP (C) 9079/2015
SUNBEAM AUTO PRIVATE LIMITED ....Petitioner
Through: Mr. Mayank Nagi with Mr. Vikrant
A. Maheshwari, Advocates.
versus
PR. COMMISSIONER OF INCOME TAX ..... Respondent
Through : Mr. Ruchir Bhatia, Senior standing
counsel.
CORAM: JUSTICE S. MURALIDHAR
JUSTICE PRATHIBA M. SINGH
JUDGMENT
% 07.12.2017
Dr. S. Muralidhar, J.:
1. These four writ petitions are by Sunbeam Auto Private Limited seeking
inter alia the quashing of an order dated 30th March 2015 passed by the
Principal Commissioner of Income Tax-8 (Pr CIT) under Section 264 of the
Income Tax Act, 1961 ('Act'), dismissing the Petitioner's application under
Section 264 of the Act for the Assessment Years ('AYs') 2007-08 to 2010-
11 whereby the Assessee sought revision of the assessment orders passed by
the Assessing Officer (AO) for the aforementioned AYs under Section 143
(3) on the issue of sales tax subsidy.
2. The AO had, in the aforementioned assessment orders, added back the
sales tax subsidy received by the Assessee as a revenue receipt thereby
rejecting its plea that it had to be treated as a capital receipt.
3. The scheme under which the Petitioner received the said subsidy also
formed the subject matter of appeal filed by Johnson Matthey India (P)
Limited being ITA No.952/Del/2011 before the ITAT for AY 2006-07. The
ITAT, by its order dated 12th August 2014, upheld the Assessee's contention
that the sales tax subsidy was a capital receipt.
4. Against the aforementioned order, the Revenue came in appeal before this
Court by filing ITA No.193/2015, which was dismissed by this Court by
way of its order dated 13th March 2015. This Court referred to the decision
of the Supreme Court in CIT v. Ponni Sugars and Chemicals Limited
[2008] 306 ITR 392 (SC) and this Court's decision in CIT v. Bougainvillea
Multiplex Entertainment Centre Pvt. Ltd. [2015] 373 ITR 14 (Del). Further
the decision of this Court in CIT v. Bhushan Steel and Strips Ltd. [2017]
398 ITR 216 (Del), which has been relied upon by the Revenue, is in appeal
before the Supreme Court in S.L.P.(C) No. 30728-30732 of 2017 and has
been stayed by that Court.
5. In that view of the matter, the impugned order dated 30 th March 2015 of
the Pr CIT dismissing the Petitioner's application under Section 264 is
hereby set aside. Resultantly, the orders of the AO dated 29 th December
2009 (for AY 2007-08), 30th September 2010 (for AY 2008-09), 24th
November 2011 (for AY 2009-10) and 9th January 2013 (for AY 2010-11)
as regards their holding that the sales tax subsidy is a revenue receipt are
hereby set aside. In other words, the sales tax subsidy received by the
Petitioner will be treated as a capital receipt and not be added to the income
of the Petitioner. The consequential orders will now be passed by the AO in
terms of this order.
6. The writ petitions are disposed of accordingly.
S. MURALIDHAR, J.
PRATHIBA M. SINGH, J.
DECEMBER 07, 2017
Rm
