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Sunbeam Auto Private Limited Vs. Pr. Commissioner Of Income Tax
December, 14th 2017
$~
*      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
WP (C) 8941/2015 & connected                                    Page 2 of 4
(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






WP (C) 8941/2015 & connected                                         Page 3 of 4
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




WP (C) 8941/2015 & connected                                       Page 4 of 4

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