आदेश / ORDER

PER GIRISH AGRAWAL, ACCOUNTANT MEMBER:

This appeal is filed by the assessee is against the order of CIT(A)/ National Faceless Appeal Centre vide order reference no. ITBA/APL/S/250/2025-26/1081170896(1) dated 25.09.2025, passed against the assessment order by Deputy Commissioner of Income Tax 14(2)(1), Mumbai u/s 143(3) of the Income-tax Act (hereinafter referred to as the “Act”), dated 30.12.2016 for the Assessment Year 2014-15.

2. Assessee has raised the following grounds of appeal:

1) On the facts and in the circumstances of the case and in law, the Ld CIT(A) erred in confirming the action of the Assessing Officer in assessing the total income of the Appellant at Rs. 65,13,58,470 as compared to the total income of Rs. 63,47,95,820 computed by the Appellant in the revised return of income for the said assessment year.

2) On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in partly upholding the additions made by the Assessing Officer in the assessment order passed under section 143(3) of the Act.

3) On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in upholding the disallowance made under section 14A read with Rule 8D of the Income-tax Rules, 1962, without appreciating that the Appellant had already made a reasonable suo motu disallowance under section 14A read with Rule 8D, considering those investments which actually yielded exempt income during the year under consideration.

4) On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in confirming the action of the Assessing Officer in including non-current investments in the subsidiary company, from which no exempt income was earned during the year, while computing the average value of investments under Rule 8D(2)(ii) and Rule 8D(2)(iii).

5) On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in upholding the addition of Rs. 19,85,241 to the book profit under section 115JB of the Act on account of the disallowance made under section 14A read with Rule 8D, without appreciating that the provisions of sub-sections (2) and (3) of section 14A read with Rule 8D are applicable only for the purpose of computing the disallowance under section 14A under the normal provisions of the Act, and not for the purpose of computing book profit under section 115JB of the Act.

6) On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in confirming the action of the Assessing Officer in treating the capital subsidy of Rs. 30,00,000 received under the incentive scheme announced by the Central Government vide Office Memorandum No. 1(10)/2001-NER dated 07.01.2003 issued by the Ministry of Commerce & Industry (Department of Industrial Policy & Promotion), as a revenue receipt liable to tax.

7) On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in not appreciating that the subsidy was granted for establishing a new industrial undertaking in a specified region of Uttarakhand and other states and was specifically intended to encourage capital investment and set-up of industrial units in the notified area, and was therefore capital in nature.

8) On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in not appreciating that eligibility for the subsidy was directly linked to the investment made in plant and machinery, and that the Appellant had duly reduced the amount of subsidy from the actual cost of plant and machinery and had claimed depreciation only on the reduced cost.

3. Brief facts of the case as culled out from records are that assessee is a public limited company engaged in the business of manufacturing and sale of packaging material of different types and sizes, manufacturing of metalized films and poly films, labeling material, cartons of different types and manufacturing and sale of packaging machinery, etc. It filed its return of income on 26.11.2014, reporting total in