TATA Chemicals Ltd. v. Dy. CIT (2022)95 ITR 134/ 216 TTJ 402 (Mum)(Trib)

S. 80IB : Industrial undertakings-Subsidy-Profits derived from business-Subsidies given by Government to enable sale to Farmers at, or below, maximum retail price-Form part of business profits-Subsidy eligible for deduction. [S. 2(24)(xvii), 148]

The Tribunal held that the facts showed that fertilisers produced by the assessee were under the retention-pricing scheme whereby manufacturers were paid the subsidy to enable them to sell the fertilisers at, or below, the indicated maximum retail price to farmers. The subsidies were, hence, income derived from the business of the eligible industrial undertaking. Therefore, the assessee, as an industrial undertaking, was eligible for the deduction under section 80-IB on the fertiliser subsidy received by it. (AY.2003-04)