ITA No. 4283/MUM/2025

Parties Involved

Facts Summary

The assessee, Sangam (India) Limited, engaged in the business of manufacturing textile and handloom products, filed a return of income for the Assessment Year 2020-21, declaring total income of Rs. 16,73,69,620/- under the normal provisions of the Income-tax Act, 1961, and book profit of Rs. 20,30,46,844/- under Section 115JB. The return included the Merchandise Exports from India Scheme (MEIS) incentive of Rs. 5,95,46,449/-. The Assessing Officer processed the return under section 143(1) and later rectified it under section 154, determining total income at Rs. 23,40,71,700/-. The Assessing Officer added deferred tax amounting to Rs. 4,30,00,000/- and rejected the claim of the assessee to exclude the MEIS incentive from total income and book profit. On appeal, the Commissioner of Income-tax (Appeals) allowed the assessee's claim regarding the MEIS incentive as a capital receipt, subject to verification. The Revenue appealed against this order.…

Legal Issues

• 1. Whether the MEIS incentive is a capital receipt not liable to tax under the normal provisions of the Act and Section 115JB.

Judgment Outcome

Decided in favour of Revenue.

Precedents Relied Upon

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