MD.NIZAMUDDIN, J. - (1.) Heard both sides. The aforesaid appeal of the revenue relating to assessment years 210-11 arises out of the impugned order dated 6th September, 2017 passed by the learned Income Tax Tribunal. Substantial questions of law involve in the instant Appeal may be simply reformulated as follows: i. Whether on the facts and in the circumstances of the case the learned Tribunal has erred in law in allowing the claim of the assessee to treat the incentives received by it on account of 'Interest subsidy' under West Bengal Incentive Schemes, 2000' and 'Powers subsidy' under West Bengal Incentive to Power Intensive Industries Scheme, 2005 as capital receipt and not revenue receipt in relevant assessment year 2010-11 and not to include the aforesaid receipts in Book Profit under Section 115 JB of the Income Tax Act, 1961 ?. ii. Whether on the facts and in the circumstances of the case the learned Tribunal erre0d in law in accepting the claim of deduction by the assessee towards 'Interest subsidy' and 'Power subsidy' under the aforesaid schemes by filing revised computation instead of revised return before the assessing officer for exclusion of the aforesaid receipts from the book profit under Section 115 JB on the ground that the said subsidies do not constitute income under Section 2(24) of the Income Tax Act, 1961 ?.
(2.) The relevant facts as emerge on perusal of record, in brief for, the purpose of adjudication on the issues involved in the instant appeal are hereunder. The assessee company is a Public Limited Company registered under the Companies Act, 1956. It is engaged in the manufacturing of Sponge Iron; Ingots and Billets, Steel Items and Ferro Alloys. It also has a captive power generating plant. For the Asst Year 2010-11, the assessee company filed its Return of Income on 12.10.2010 disclosing "NIL" income as per the normal computation and Rs. 17,69,51,366/- as Book Profit under MAT i.e. under Section 115JB of the Act. Subsequently, during the course of assessment proceedings, the assessee company filed Revised Computation of its income under normal provisions as well as under Section 115JB of the Act, on 22.11.2012. The same computation was filed again on 10.12.2012. The assessee company had revised the computation of income mainly, in order to claim deduction of Capital Receipts being 'Interest Subsidy' and 'Power Subsidy' amounting to Rs. 4,52,33,330/- and Rs. 4,81,63,439/-. The assessee had filed original return of income treating the interest subsidy as revenue receipt but during the assessment proceedings the assessee had rectified its mistake and claimed the aforesaid subsidies as capital receipt by filing a Revised Computation of Income since the time limit for filing Revised Return had lapsed. The Assessing Officer however treated the interest subsidy and power subsidy as a revenue receipt and brought the same to tax. The assessee treated the Interest Subsidy of Rs. 4,52,33,330/- and Power Subsidy of Rs. 4,81,63,649/- as Capital Receipt in the revised computation filed before the Assessing Officer during the course of assessment proceedings. The assessee had made investment in Sponge Iron Plant and Mega Project (Induction manufacturing units Sponge Iron, Power, Billet) which made the assessee eligible for subsidy under the Scheme taken out by the Government of West Bengal, commerce & Industries Department for making capital investments in backward area, namely, 'Bankura'.
(3.) The West Bengal Incentive Scheme, 2000 was expressly for the purpose of attracting private investment in the State of West Bengal in the specified areas which are industrially backward. To promote industrialization, the Government offered various incentives/subsidies including 'State Capital Subsidy' and 'Interest subsidy' when a 'unit' was set up in any area specified in Group C i.e. backward area as defined under the Scheme. At page 9 Para No. 7 of the Scheme, the areas of West Bengal have been segregated into 'Development Areas and Backward Areas' by grouping them into three Groups A, B and C. Maximum Benefits in the form of Subsidy has been given to areas under 'Group C'. The assessee had received both the subsidies for setting up industry in 'Bankura', which falls under 'Group C' i.e. backward area. The aforesaid subsidies were not in the nature of general assistance to the assessee to carry on his business or trade more profitable but were for industrial development which clearly falls under the category of fixed capital incentive. The assessee received an eligibility Certificate from the Government of West Bengal wherein it received approval for Interest Subsidy. The object of the West Bengal Incentive Scheme, 2000 would be apparent from the following extracts:- "West Bengal Incentive Scheme 1999 Scheme had an attractive provision of Sales Tax related by way of "remission" of "deferment". But in pursuance of the National Policy, the State Govt. had to discontinue the Sales Tax related Incentives from 1st January, 2000. However, as there is a strong need for fiscal support for the promotion of industry in the State, the State Government decided to introduce the West Bengal incentive Scheme, 2000, with different and new features, quite attractive for industries in large medium, small scale and tourism sectors." "4. APPLICABILITY OF THE 2000- SCHEME: ;