Ita/183/2009 Of The Commr. Of Income Tax v. M/S.english Indian Clays Ltd

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR. JUSTICE C.K.ABDUL REHIM MONDAY, THE 13TH JULY 2009 / 22ND ASHADHA 1931 ITA.No. 183 of 2009() --------------------- ITA.1137/COCH/2004 of I.T.A.TRIBUNAL,COCHIN BENCH .................... APPELLANT/APPELLANT: -------------------- THE COMMISSIONER OF INCOME TAX, TRIVANDRUM. BY ADV. SRI.P.K.R.MENON,SR.COUNSEL, GOI(TAXES) SRI.JOSE JOSEPH, SC, FOR INCOME TAX RESPONDENT(S): --------------- M/S.ENGLISH INDIAN CLAYS LTD.,TRIVANDRUM. THIS INCOME TAX APPEAL HAVING COME UP FOR ADMISSION ON 13/07/2009, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: C.N.RAMACHANDRAN NAIR &C.K.ABDUL REHIM, JJ. ....................................................................I.T. Appeal No.183 of 2009 .................................................................... Dated this the 13th day of July, 2009. JUDGMENT Ramachandran Nair, J. Three issues are raised in the appeal filed by the revenue. Firstone pertains to department's claim that subsidy received is to be treatedas revenue assessable for tax. On going through the Tribunal's orderwe find that subsidy is given for investment in pollution controlmeasures taken by the assessee and it is in the form of reimbursing partof the cost of pollution control equipment purchased by the assessee.We are in agreement with the finding of the Tribunal that subsidy istowards capital outlay and hence not a revenue receipt. 2. The next issue pertains to addition on lease rentals deleted by the lower authorities in appeal. Department's case is that the assesseehas been taking lease rentals in the previous years on accrual basis, butdiscontinued the practice and therefore, rent for this year also isassessable. However, it is the finding of the first appellate authoritythat after changing the pattern of accounts, assessee credited the amount on cash basis and remitted the tax in later years. Consequently we do not find any ground to interfere with the order in appeal issuedby the Tribunal confirming the first appellate authority's order. 3. The last issue pertains to depreciation at the higher rate in respect of plant and machinery. In the preceding year, whileconsidering the claim the appellate authority directed the assessee toproduce certificate of eligibility which was in fact produced in revisedassessment proceedings and the claim was allowed. In fact, this year'sclaim is exactly of the same nature and pertaining to the same plant andmachinery. We do not find any ground to interfere with the finding ofthe Tribunal on this issue also. In view of the foregoing findings, wedismiss the department's appeal. C.N.RAMACHANDRAN NAIRJudge C.K.ABDUL REHIM Judge