THE DCIT, (CENTRAL)-1, BHOPAL v. M/S. AYUSHMAN DIAGNOSTIC PVT. LTD., BHOPAL

cannot amend a return of income filed by him for making a claim for deduction other than by filing a revised return.

(ii) Ld. CIT(A) has erred in facts and circumstances of the case by deleting the addition of Rs. 5,00,00,000/- for assessment year 2015-16 made by AO on account of disallowance of subsidy received by the assessee in February, 2017, thereby treating the subsidy as capital in nature."

2. The assessee-company filed its return of income of relevant AY 2015- 16 declaring negative total income (loss) of Rs. 12,45,75,252/-. In its P&L A/c filed with return of income, the assessee credited a sum of Rs. 5,00,00,000/- in respect of a subsidy treating the same as 'revenue subsidy'. During assessment-proceeding, the assessee claimed before AO that the subsidy was in fact a 'capital subsidy' and the same had been wrongly offered as 'revenue subsidy' under a mistaken impression. The assessee requested the AO to exclude it from total income. The AO, however, rejected claim of assessee by observing thus:

"The contention of assessee that the amount of Rs. 5,00,00,000/- is incorrectly treated as revenue subsidy is not acceptable, it is evident that before receiving the subsidy a number of document are required to be filed before different authorities. Hence, the question of incorrect treatment of the subsidy does not arise. In support of the claim assessee furnished certain documents on going through the document it is seen that the subsidy pertaining to the documents filed by assessee was granted in February 2017 which is after the assessment year 2015-16. Hence, the document filed by assessee has no merit further, in the light of decision of Hon'ble Supreme Court in Goetze (India) Ltd. V. CIT, (2006) 157 Taxman 1, it has been held by Hon'ble Supreme Court that the assessee cannot amend a RoI filed by him for making a claim for deduction other than by filing a revised return. In this case the assessee has not revised the RoI. Considering all the facts on records the claim of the assessee is rejected."

3. During first-appeal, the CIT(A), however, reversed the action of AO and allowed assessee's claim. The order of CIT(A) is extracted below for an immediate reference:

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4. Now, the revenue is aggrieved by CIT(A)'s order and come before us in this appeal.

5. Before us, Ld. DR for revenue supported the order of AO and emphasized the findings made therein by AO. On the other hand, Ld. AR for assessee defended the order of CIT(A) on the lines of reasoning noted by

CIT(A).

6. We have heard rival contentions of both sides and perused the orders of lower-authorities.

7. There are two issues before us for adjudication i.e. (i) Whether the assessee should be allowed the benefit of exclusion of the impugned sum of Rs. 5,00,00,000/- from total income which was offered by assessee himself in the return of income as a revenue receipt though under mistaken impression; and (ii) Whether the impugned sum was really in the nature of 'revenue subsidy' or 'capital subsidy'. The revenue has raised first issue in Ground No. 1 and second issue in Ground No. 2.

8. So far as first issue involved in Ground No. 1 is concerned, it is now well settled by several judicial rulings that though the AO cannot allow any claim raised before him except by filing of revised-return which was admittedly not filed by assessee in present case, this rider or restriction is not applicable to appellate authorities. We believe that the CIT(A) has rightly decided this question in favour of assessee by giving a cogent analysis in Para No. 6.5 of his order re-produced earlier. Therefore, without repeating

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the contentions accepted by CIT(A) for the sake of brevity, we straightaway subscribe to the view taken by Ld. CIT(A). Therefore, this ground of revenue is dismissed.

9. Regarding second issue involved in Ground No. 2, we note several aspects. Firstly, the AO has noted, in Para 3 of assessment-order re- produced earlier, that the assessee furnished certain documents regarding impugned subsidy. On going through those documents, the AO found that the subsidy pertaining to the documents filed before him, was granted in February, 2017 which was after AY 2015-16 involved in present case. Therefore, the AO did not find any merit in the documents filed by assessee in support of claim of 'revenue subsidy'. This clearly shows that there is no proper examination of the nature of impugned subsidy at the level of AO. Secondly, while dealing this issue, the CIT(A) has mentioned in Para No. 6.2 of his order, re-produced earlier, that the assessee received subsidy under 'Health Investment Policy, 2012'. The CIT(A) has mentioned some features of 'Health Investment Policy, 2012'. But then, in the immediate next Para 6.3, the CIT(A) has mentioned that the assessee was granted subsidy vide letter dated 15.03.2017 under the terms and conditions stipulated in 'Madhya Pradesh Healthcare Investment Policy, 2016'. Thus, there is a clear contradiction in the notings of CIT(A) in as much at one place he says that the assessee received subsidy under '2012' scheme and also mentions features of '2012' scheme but at another place he mentions that the assessee was granted subsidy vide letter dated 15.03.2017 under '2016'

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scheme. This contradiction also supports the very stand of AO in assessment-order that the subsidy pertaining to the documents filed before him was granted in February, 2017 after expiry of AY 2015-16. Notably, the assessment-year involved in present appeal is AY 2015-16 relating to previous year 2014-15 and if the subsidy was granted vide letter dated 15.03.2017 as noted by CIT(A), how could the assessee credit subsidy to its P&L A/c of the year ended on 31.03.2015? Was it so that the assessee accounted for subsidy on accrual basis which is very much unlikely because this type of practice is normally not followed for govt. subsidy. That apart, the CIT(A) has also mentioned in Para 6.3 as under:

"On perusal of assessment-order, it is evident that Ld. AO has not raised any objection about the true nature of impugned subsidy. In other words, the claim of the appellant that impugned subsidy amount is not taxable being capital in nature has not been rejected on merits nor AO has expressed his views that said subsidy was of 'revenue nature' and therefore, liable to tax. The only reason for rejecting the claim of the appellant seems to me is because such claim was made through letter dated 17.12.2017 and not be filing revised return as held by Apex Court in the case of Goetze (India) Pvt. Ltd. Vs. CIT (supra). Bona fides and allowability of the impugned claim i.e. treating of subsidy amount as 'capital subsidy' has never been doubted by the Ld. AO." This observation of CIT(A) is contrary to the observation made by AO in as much as the AO has rejected assessee's contention of 'revenue subsidy' in absence of documents or for not believing documents. Thus, the CIT(A)'s cannot be said to be a cogent order. Faced with this situation, we feel that it is very necessary to examine completed details and documents of subsidy i.e. under which scheme, the subsidy was received; when and how the assessee received subsidy; how it was accounted for in AY 2015-16, etc. Such a detailed probe is very necessary to arrive at an unambiguous conclusion. It is also to be mentioned that in the event it is found that it was a 'capital subsidy', it may further necessitate adjustment in cost of assets as per provisions of section 43(1) of the act. This aspect is also be checked by

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AO. Therefore, we think it most appropriate to remit this issue back to the file of AO for a deeper examination and afresh adjudication. The AO shall provide necessary opportunities to assessee and the assessee shall also avail those opportunities and place before AO proper details/documents. Ordered accordingly. This ground is allowed in these terms.

10. Resultantly, this appeal of revenue is partly allowed.

Order pronounced in the open court on 21.12.2023. Sd/- Sd/-

(VIJAY PAL RAO) (B.M. BIYANI)

JUDICIAL MEMBER ACCOUNTANT MEMBER

Indore

िदनांक/Dated : 21.12.2023 CPU/Sr. PS

Copies to: (1) The appellant

(2) The respondent

(3) CIT

(4) CIT(A)

(5) Departmental Representative

(6) Guard File By order

UE COPY

Assistant Registrar Income Tax Appellate Tribunal Indore Bench, Indore

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