P.K. Bansal, Accountant Member - The cross-appeals for the assessment year 2008-09 have arisen against the order of the Commissioner of Income-tax (Appeals) dated January 19, 2011, while the cross-appeals for the assessment year 2009-10 have arisen against the order of the Commissioner of Income-tax (Appeals) dated December 2, 2012. Since the issues in both years are common, therefore, all the appeals are being disposed of by this common order.

2. In the assessment year 2008-09, the Revenue has taken the following effective ground of appeal :

1. On the facts and circumstances of the case the learned Commissioner of Income-tax (Appeals) has erred in law as well as fact in allowing the disallowances made by the Assessing Officer in respect of value added tax remission of Rs. 46,67,034 under section 80-IC of the Income-tax Act, 1961, from the total income of the assessee. The Commissioner of Income-tax (Appeals) in his order has cited the hon'ble jurisdictional Income-tax Appellate Tribunal verdict in the case of Plast India Enterprises (P.) Ltd. [I.T. Appeal No. 50/Gau/2009] in which value added tax remission was treated akin to central excise duty refund and that the hon'ble Gauhati High Court had already given relief in the latter in the case of ACIT v. Meghalaya Steels Ltd. [IT Appeal No. 46 (Gau.) of 2009, dated 19-3-2010]. The Department has filed in appeal against the hon'ble Gauhati High Court's verdict on the issue of central excise refund before the hon'ble Supreme Court. The result is yet to attain finality.

3. In the assessment year 2009-10, the Revenue has taken the following effective grounds of appeal :

1. On the facts and circumstances of the case the learned Commissioner of Income-tax (Appeals) has erred in law as well as fact in allowing the disallowances made by the Assessing Officer in respect of value added tax remission of Rs. 39,03,590 under section 80-IC of the Income-tax Act, 1961 from the total income of the assessee. The Commissioner of Income-tax (Appeals) in his order has cited the hon'ble jurisdictional Income-tax Appellate Tribunal verdict in the case of Plast India Enterprises P. Ltd. (supra) in which value added tax remission was treated akin to central excise duty refund and that the hon'ble Gauhati High Court had already given relief in the latter in the case of Meghalaya Steels Ltd. (supra) The Department has filed in appeal against the hon'ble Gauhati High Court's verdict on the issue of central excise refund before the hon'ble Supreme Court. The result is yet to attain finality.

2. On the facts and circumstances of the case the learned Commissioner of Income-tax (Appeals) has erred in law as well as fact in allowing the disallowances made by the Assessing Officer in respect of central excise refund of Rs. 74,26,079 under section and 80-IC of the Income-tax Act, 1961 from the total income of the assessee. The Commissioner of Income-tax (Appeals) in his order has cited the hon'ble Gauhati High Court judgment in the case of Meghalaya Steels Ltd. (supra). The Department has filed an appeal against the hon'ble Gauhati High Court's verdict on the issue of central excise refund before the hon'ble Supreme Court. The issue is yet to attain finality.

4. In the assessment year 2008-09, the assessee has taken the following effective grounds of appeal :

1. That both Assessing Officer as well as the Commissioner of Income-tax (Appeals) erred in law as on facts in denying the benefit of deduction under section 80-IC of the Income-tax Act, 1961, to the appellant on the following subsidies/incomes :

2. That both Assessing Officer as well as the Commissioner of Income-tax (Appeals) ought to have held that the amounts of various subsidies received by the appellant as mentioned in ground No. 1 above, would go on to reduce the corresponding expenses incurred under those heads, (irrespective of accounting treatment given by