M/s. ACE Engg. Co., Jammu V. The Deputy Commissioner of Income tax, Jammu

CO 17/ASR/2012

• Counselvise Citation: [2012] 122 COUNSELVISE.COM (IT) 7327 (ITAT-AMRITSAR)
• Duration Of Justice: 18 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 03-07-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 15-06-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: R L CHHANALIA
• Keywords: Capital receipt
• Section: 80IB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. BEFORE SH. H.S. SIDHU, JUDICIAL MEMBER AND SH. B.P.JAIN, ACCOUNTANT MEMBER I.T.A. NO. 148(ASR)/2012 ASSESSMENT YEAR:2009-10 PAN :AAIFA4197Q DY. COMMR. OF INCOME TAX, VS. M/S. ACE ENGINEERING CO. CIRCLE-1, JAMMU. BARI BRAHAMNA, JAMMU. (APPELLANT) (RESPONDENT) C.O. NO.17(ASR)/2012 (ARISING OUT OF ITA NO. 148(ASR)/2012) ASSESSMENT YEAR : 2009-10 M/S. ACE ENGINEERING CO. VS. DY. COMMR. OF INCOME-T AX, BARI BRAHAMNA, JAMMU. CIRCLE-1, JAMMU. (APPELLANT) (RESPONDENT) APPELLANT BY:SH. R.L. CHHANALIA, DR RESPONDENT BY: NONE DATE OF HEARING:27/06/2012 DATE OF PRONOUNCEMENT:03/07/2012 ORDER PER BENCH ; THE PRESENT APPEAL FILED BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF CIT(A), JAMMU, DATED 29.02.2012 ON THE FOLLOWING GROUNDS: ITA NO.148(ASR)/2012 CO NO.17(ASR)/2012 2 1 ON THE FACTS AND CIRCUMSTANCES WHETHER THE LD. CIT(A) WAS RIGHT IN ALLOWING RELIEF ON ACCOUNT OF DEDUCTION U/ S 80IB ON CENTRAL EXCISE DUTY REFUND BY RELYING UPON ORDERS OF HON'BL E HIGH COURT IF J&K, JAMMU WHICH HAS BEEN DELIVERED NOT ON MERITS O F THE ISSUE BUT HOLDING THE RECEIPT TO BE A CAPITAL RECEIPT ONLY BE CAUSE THE POLICY UNDER WHICH THE SAME WAS PAID ENVISAGED TACKLING TH E UNEMPLOYMENT IN THE STATE WHICH CANNOT BE SAID TO BE A GOOD TEST FOR DECIDING WHETHER A RECEIPT IS A TRADING RECEIPT OR A CAPITAL RECEIPT. 2. ON THE FACTS AND CIRCUMSTANCES WHETHER THE LD. C IT(A) WAS RIGHT IN FACTS AND CIRCUMSTANCES AND IN LAW IN NOT APPRECIATING THE JUDGMENTS OF HON'BLE SUPREME COURT OF INDIA IN THE CASE OF PONNI SUGAR & SAWHNEY STEEL AND PRESS WORKS LTD, WHEREIN THE HON'BLE SUPREME COURT HAD HELD SUCH RECEIPTS TO BE THE REVE NUE RECEIPTS IN AS MUCH AS IN THAT CASE PAYMENTS WERE MADE ONLY AFTER THE INDUSTRIES HAD BEEN SET UP AND PAYMENTS WERE NOT MADE FOR PURPOSE OF SETTING UP OF INDUSTRIES. 3. ON THE FACTS AND CIRCUMSTANCES WHETHER THE LD. C IT(A) WAS RIGHT IN FACTS AND CIRCUMSTANCES AND IN LAW IN NOT CONSIDERING THE DECISION IN THE CASE OF SEAHAM HARBOUR DOCK COMPANY WHICH LAYS DOWN TWO IMPORTANT TESTS FOR DETERMINING WHETHER RE CEIPTS IS A TRADING RECEIPT OR A CAPITAL RECEIPT. 4. ON THE FACTS AND CIRCUMSTANCES WHETHER THE LD. C IT(A) WAS RIGHT IN FACTS AND CIRCUMSTANCES AND IN LAW IN NOT APPRECIATING AND APPLIED THE PURPOSE TEST AS LAID DOWN BY THE JUDGME NTS OF THE HON'BLE SUPREME COURT. IN THE CASE OF ASSESSEE, THE MONEY RECEIVED BY THE ASSESSEE ON ACCOUNT OF REFUND OF CENTRAL EXCISE WAS NOT SUPPOSED TO BE SPENT IN A PARTICULAR MANNER FOR PURPOSE OF SUBS TANTIAL EXPANSION OF THE INDUSTRY. REGARDING DISALLOWANCE U/S 40(A)(IA) OF THE INCOME TAX ACT, 1961, IN RESPECT OF MANUFACTURING DIVISION. 1. ON THE FACTS AND CIRCUMSTANCES WHETHER THE LD. CIT(A) WAS RIGHT IN ALLOWING RELIEF ON ACCOUNT OF DEDUCTION U /S 80IB ON DISALLOWANCE MADE U/S 40(A)(IA) AS THE ASSESSEE HAS CONTRAVENED THE PROVISIONS OF THE INCOME TAX ACT, IN VIEW OF THE DE CISION OF THE JURISDICTIONAL BENCH IN THE CASE OF M/S. KASHMIR TU BES REPORTED IN ITA NO.148(ASR)/2012 CO NO.17(ASR)/2012 3 ITA NO.145(ASR)/2005 DATED 07.12.2007 WHERE SUCH DI SALLOWANCES WERE UPHELD BY THE HONBLE ITAT, AMRITSAR. 3. NOTICE OF HEARING WAS ISSUED TO THE ASSESSEE BY RPAD FOR 27.06.2012. INSPITE OF THIS, NEITHER THE ASSESSEE NOR HIS AUTHO RIZED REPRESENTATIVE APPEARED ON THE DATE OF HEARING. THE ASSESSEE HAS N OT EVEN FILED ANY ADJOURNMENT APPLICATION. KEEPING IN VIEW THE FACTS AND CIRCUMSTANCES, WE ARE OF THE VIEW THAT NO USEFUL PURPOSE WOULD BE SER VED IF THE NOTICE IS ISSUED TO THE ASSESSEE AGAIN AND AGAIN. THEREFORE, WE DISP OSING OF THE PRESENT APPEAL EX-PARTE AFTER HEARING THE LEARNED DR. 3. AFTER HEARING THE LD. DR AND PERUSING THE RELE VANT MATERIAL AVAILABLE WITH US, WE ARE OF THE VIEW THAT AS REGA RDS THE ISSUE INVOLVED IN GROUND NOS. 1 TO 4 RELATING TO DEDUCTION UNDER SEC TION 80IB ON EXCISE DUTY REFUND, IT IS AN ADMITTED FACT THAT THE ISSUE IN DI SPUTE HAS ALREADY BEEN ADJUDICATED AND DECIDED IN FAVOUR OF THE ASSESSEE B Y THE DECISION OF THE HON'BLE JURISDICTIONAL HIGH COURT OF JAMMU & KASHMI R IN THE CASE OF SHREE BALAJI ALLOYS V. CIT AND ANOTHER (2011) 333 ITR 335 (J&K) BY HOLDING THAT THE EXCISE DUTY REFUND IS TO BE TREATED AS CAPITAL RECEIPT AND NOT LIABLE TO BE TAXED. 3.1. THE LD. FIRST APPELLATE AUTHORITY HAS ALSO DE CIDED THIS ISSUE IN FAVOUR OF THE ASSESSEE BY RELYING UPON THE DECISION OF TH E HON'BLE JURISDICTIONAL HIGH COURT OF J & K, IN THE CASE OF SHREE BALAJI A LLOYS V. CIT AND ANOTHER ITA NO.148(ASR)/2012 CO NO.17(ASR)/2012 4 (2011) 333 ITR 335 (J&K). THEREFORE, RESPECTFULLY F OLLOWING THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT (SURPA), WE D ISMISS GROUND NOS. 1 TO 4 OF THE REVENUE RELATING TO EXCISE DUTY REFUND. 4. AS REGARDS DISALLOWANCE MADE U/S 40(A)(IA) OF THE INCOME-TAX ACT, 1961, WE ARE OF THE VIEW THAT THE ISSUE IN DISPUT E IS SQUARELY COVERED BY THE DECISION OF THE ITAT, AMRITSAR BENCH IN THE CASE O F M/S. SUN PHARMACEUTICALS, IN ITA NO.184(ASR)/2009 FOR THE AS SESSMENT YEAR 2005-06 DATED 11.06.2010, IN FAVOUR OF THE ASSESSEE AND AGA INST THE REVENUE. 5. AFTER HEARING THE LD. DR AND PERUSING THE ORDER OF THE LD. CIT(A) ON THE ISSUE IN DISPUTE, WE ARE OF THE CONSIDERED VIE W THAT THE LD. FIRST APPELLATE AUTHORITY HAS PASSED A WELL REASONED ORDER BASED ON FACTS AND MATERIALS AVAILABLE ON RECORD, WHICH REQUIRES NO INTERFERENCE AT OUR LEVEL. THE LD. FIRST APPELLATE AUTHORITY WHILE ADJUDICATING THE ISSUE IN DISPUTE HAS ALSO FOLLOWED THE DECISION OF THE ITAT, AMRITSAR BENCH, IN THE CA SE OF M/S. SUN PHARMACEUTICALS ITA NO.184(ASR)2009 FOR THE ASSESS MENT YEAR 2005-06 DATED 11.06.2010. THUS, IN VIEW OF THE ABOVE DISCUS SIONS AND WELL REASONED FINDINGS GIVEN BY THE LD. CIT(A), WE DO NOT FIND AN Y JUSTIFICATION TO INTERFERE WITH THE SAME. ACCORDINGLY, THIS GROUND OF THE REVE NUE IS ALSO DISMISSED. ITA NO.148(ASR)/2012 CO NO.17(ASR)/2012 5 6. NOW, WE TAKE UP C.O. NO.17(ASR)/2012 OF THE ASS ESSEE. SINCE, WE HAVE UPHELD THE IMPUGNED ORDER OF THE CIT(A) ON TH E BASIS OF THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT OF J & K I N THE CASE OF SHREE BALAJI ALLOYS VS. CIT AND ANOTHER (2011) 333 ITR 335 AND T HIS BENCH OF ITAT IN THE CASE OF M/S. SUN PHARMACEUTICALS ITA NO.184(AS R)2009 FOR THE ASSESSMENT YEAR 2005-06 DATED 11.06.2010, THEREFORE , THE C.O. FILED BY THE ASSESSEE IS ALSO DISMISSED. 7. IN THE RESULT, THE APPEAL OF THE REVENUE AS WEL L AS C.O. OF THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 3RD JULY, 2012. SD/- SD/- (B.P. JAIN) (H.S. SIDHU) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 3RD JULY, 2012 /SKR/ COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE:M/S. ACE ENGINEERING CO. JAMMU. 2. THE DCIT, CIRCLE-1, JAMMU. 3. THE CIT(A) 4. THE CIT 5. THE SR DR, ITAT, AMRITSAR. TRUE COPY BY ORDER (ASSISTANT REGISTRAR) ITA NO.148(ASR)/2012 CO NO.17(ASR)/2012 6 INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH: AMRITSAR.