M/s Vardhman Textiles Ltd., Ludhiana V. ACIT, Ludhiana

CO 40/CHANDI/2012

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 3948 (ITAT-CHANDIGARH)
• Duration Of Justice: 6 year(s) 2 month(s) 26 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 05-02-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 05-02-2019
• Assessment Year: 2005-2006
• Appeal Filed On: 09-11-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: G S PHANI KISHORE
• Assessee Lawyers: SUBHASH AGGARWAL
• Keywords: Capital receipt; Reassessment proceedings
• Section: 147; 12

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, B, CHANDIGARH . . , , BEFORE SHRI N.K. SAINI, VICE PRESIDENT & SHRI SANJ AY GARG, JUDICIAL MEMBER ./ ITA NOS. 985 TO 987/CHD/2012 ! / ASSESSMENT YEARS : 2005-06 TO 2007-08 THE ACIT, CIRCLE 1, LUDHIANA '# VARDHMAN TEXTILES LIMITED, CHANDIGARH ROAD, LUDHIANA $ % ./PAN NO: AABCM4692E APPEAL AGAINST THE ORDER OF CIT(A) - 1, LUDHIANA DATED 4.7.2012 C.O. NOS. 40 TO 42/CHD/2012 ( IN ./ ITA NOS. 985 TO 987/CHD/2012) ! / ASSESSMENT YEARS : 2005-06 TO 2007-08 VARDHMAN TEXTILES LIMITED, CHANDIGARH ROAD, LUDHIANA '# THE ACIT, CIRCLE 1, LUDHIANA $ % ./PAN NO: AABCM4692E APPEAL AGAINST THE ORDER OF CIT(A) - 1, LUDHIANA DATED 4.7.2012 ' ( / REVENUE BY : SH. G.S. PHANI KISHORE, CIT DR )* ' ( /ASSESSEE BY : SH. SUBHASH AGGARWAL, ADVOCATE + , ' *-% /DATE OF HEARING : 05.02.2019 ./! ' *-% /DATE OF PRONOUNCEMENT : 05. 02.2019 / ORDER PER BENCH: THESE APPEALS BY THE REVENUE AND CROSS OBJECTIONS B Y THE ASSESSEE ARE AGAINST THE SEPARATE ORDERS OF THE COMMISSIONER OF INCOME TAX (APPEALS)-1, LUDHIANA [HEREINAFTER REFERRED TO AS CIT(A)] RELATING TO RESPECTIVE ASSESSMENT YEARS 2005-06 TO 2007-08. ITA NOS. 985 TO 987 & C.OS. 40 TO 42/CHD/2012- M/S VARDHMAN TEXTILES LTD., LUDHIANA 2 2. SINCE THE ISSUES INVOLVED IN ALL THE APPEALS ARE IDENTICAL, HENCE, THE APPEALS HAVE BEEN HEARD TOGETHER AND ARE BEING DISP OSED OF BY THIS COMMON ORDER. FIRST, WE SHALL DEAL WITH THE APPEA L OF THE REVENUE IN ITA NO. 985/CHD/2012 FOR ASSESSMENT YEAR 2006-07. ITA NO. 985/CHD/2012 (A.Y. 2006-07). 3. THE REVENUE IN THIS APPEAL HAS TAKEN THE FOLLOW ING GROUNDS OF APPEAL:- 1. THAT THE LD. CIT(A) HAS ERRED BOTH IN LAW AND FACTS BY HOLDING THAT INTEREST REIMBURSEMENT AMOUNTING TO RS.3,89,54 ,164/- UNDER TECHNOLOGY UPGRADATION FUND (TUFS) IS ELIGIBL E DEDUCTION U/S 10B/80IB/80IC, WHEREAS INTEREST REIMB URSEMENT WAS RIGHTLY EXCLUDED BY THE ASSESSING OFFICER FROM ELIGIBLE PROFITS OF THE PURPOSE OF DEDUCTION U/S 10B/80IB/80 IC OF AS THE I.T. ACT, 1961. 2. THE ORDER OF THE LD. CIT(A) BE SET ASIDE AND THAT O F ASSESSING OFFICER BE RESTORED. 3. THAT THE APPELLANT CRAVES LEAVE TO ADD/ALTER/AMEND ANY GROUND OF APPEAL ON OR BEFORE THE DUE DATE OF HEARING OF APPE AL. 4. GROUND NO.1 : VIDE THIS GROUND, THE REVENUE HAS AGITATED THE ACTION OF THE CIT(A) BY HOLDING THE INTEREST REIMBU RSEMENT UNDER TECHNOLOGY UPGRADATION FUND (TUFS) AS ELIGIBLE DEDU CTION U/S 10B/80IB/80IC OF THE I.T. ACT, AS AGAINST THE ACTIO N OF THE ASSESSING OFFICER EXCLUDING THE SAME FROM ELIGIBLE DEDUCTIONS . 5. AT THE OUTSET, THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT THE ISSUE RAISED BY REVENUE IS COVERED BY THE DECISION OF THE TRIBUNAL DATED 18.12.2018 PASSED IN THE OWN CASE O F THE ASSESSEE FOR ITA NOS. 985 TO 987 & C.OS. 40 TO 42/CHD/2012- M/S VARDHMAN TEXTILES LTD., LUDHIANA 3 EARLIER ASSESSMENT YEARS 2006-07 & 2007-08 IN ITA N O. 1429/CHD/2010 & OTHERS. 6. THE LD. DR HAS ALSO FAIRLY SUBMITTED THAT THE I SSUE IS REQUIRED TO BE RESTORED TO THE CIT(A) FOR DECISION AFRESH IN THE LIGHT OF THE DECISION OF THE TRIBUNAL DATED 18.12.2018 (SUPRA). 7. WE HAVE GONE THROUGH THE ORDER OF THE TRIBUNAL D ATED 18.12.2018 PASSED IN THE OWN GROUP CASE OF THE ASSE SSEE, WHEREIN, THE THIS ISSUE RAISED VIDE ADDITIONAL GROUND BY THE ASS ESSEE RELATING TO INTEREST REIMBURSEMENT RECEIVED UNDER TECHNOLOGY U PGRADATION FUND SCHEME (TUFS) WHETHER SHOULD BE TREATED AS CAPITA L RECEIPT OR REVENUE RECEIPT AND IF TREATED AS REVENUE RECEIPT, THEN WH ETHER THE SAME IS ELIGIBLE FOR DEDUCTION US 10B/80IB/80IC OF THE I.T.ACT, HAS BEEN RESTORED TO THE FILE OF THE CIT(A) FOR DECISION AFRESH. 8. CONSIDERING THE ABOVE SUBMISSIONS OF PARTIES, TH IS ISSUE RAISED VIDE GROUND NO.1 BY THE REVENUE IS RESTORED TO THE FILE OF THE CIT(A) FOR ADJUDICATION AFRESH IN ACCORDANCE WITH LAW TAKING I NTO CONSIDERATION THE RELEVANT CASE LAWS AS MAY BE AVAILABLE OR CITED BEF ORE HIM. THE APPEAL OF THE REVENUE IS ACCORDINGLY TREATED AS PARTLY ALLOWED. 9. GROUND NO.2 & 3 : THESE GROUNDS ARE GENERAL IN NATURE AND DO NOT REQUIRE ANY SPECIFIC ADJUDICATION. ITA NOS 986& 987/CHD/2012 (A.Y. 2006-07 & 2007-08) 10. SINCE THE FACTS AND ISSUE RELATED IN THE ASSESS MENT YEARS I.E. 2006-07 AND 2007-08 ARE SIMILAR TO THAT HAVE BEEN RAISED I N ASSESSMENT YEAR 2005- ITA NOS. 985 TO 987 & C.OS. 40 TO 42/CHD/2012- M/S VARDHMAN TEXTILES LTD., LUDHIANA 4 06 BY THE REVENUE, THIS ISSUE RAISED IN BOTH THE APPEALS IS ALSO RESTORED TO THE FILE OF THE CIT(A) WITH SIMILAR DIRECTIONS. THE APPEALS OF THE REVENUE ARE ACCORDINGLY TREATED AS PARTLY ALLOWED . C.O. NOS. 40/CHD/2012 (A.Y. 2006-07). 11. THE ASSESSEE IN ITS CROSS OBJECTIONS HAS TAKEN THE FOLLOWING GROUNDS OF APPEAL:- 1. THAT THE LD. CIT(A) HAS ERRED IN LAW AND ON FACT S WHILE UPHOLDING THE ACTION OF THE ASSESSING OFFICER TO IN ITIATE REASSESSMENT PROCEEDINGS U/S 147 OF THE INCOME-TAX ACT, 1961 WHICH ARE PATENTLY ILLEGAL AND INVALID. 2. THAT THE LD. CIT(A) HAS ERRED IN LAW AND ON FACT S WHILE NOT ADJUDICATING THE GROUND RAISED BY THE ASSESSEE FOR TREATING THE INTEREST REIMBURSEMENT OF RS. 10,54,09,010/- AS A C APITAL RECEIPT. 12 SO FAR AS THE ISSUE RELATING TO REOPENING OF ASS ESSMENT U/S 147 OF THE ACT IS CONCERNED, WE DO NOT FIND ANY MERIT IN THE S AME. EVEN THE ASSESSEE ITSELF HAS TAKEN THE GROUND THAT THE INTEREST REIMB URSEMENT UNDER TUFS SCHEME IS CAPITAL RECEIPT, HENCE, EVEN THOUGH THIS GROUND AGITATING THE REOPENING OF SAME, IN OUR VIEW, HAS BECOME INFRUCTU OUS. GROUND NO.1 OF THE C.O. IS, THEREFORE, DISMISSED. 13. SO FAR AS THE ISSUE RAISED IN SECOND GROUND OF C.O. IS CONCERNED, SINCE WHILE ADJUDICATING THE GROUNDS OF APPEAL RAIS ED BY THE REVENUE IN ALL THE ASSESSMENT YEARS I.E. 2005-06 TO 2007-08, WE HA VE RESTORED THIS ISSUE TO THE FILE OF THE CIT(A) FOR ADJUDICATION AFRESH, HENCE, THIS GROUND IS ALSO RESTORED TO THE CIT(A) ACCORDINGLY. ITA NOS. 985 TO 987 & C.OS. 40 TO 42/CHD/2012- M/S VARDHMAN TEXTILES LTD., LUDHIANA 5 C.O. NOS. 41 & 42/CHD/2012 (A.Y. 2006-07 & 2007-08) 14. SINCE THE ISSUES RAISED IN THESE CROSS OBJECTIO NS ARE SIMILAR TO THAT HAVE BEEN RAISED IN C.O.NO.40/CHD/2012 , OUR FINDINGS GIVEN THEREIN WILL APPLY MUTATIS-MUTANDIS TO THESE CROSS OBJECTIONS ALSO. IN THE RESULT, ALL THE APPEALS OF THE REVENUE AND C ROSS OBJECTIONS OF THE ASSESSEE STANDS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 05.02.2019. SD/- SD/- ( . . / N.K. SAINI) ( !' # / SANJAY GARG) $%& / VICE PRESIDENT ' ( / JUDICIAL MEMBER DATED : 05.2.2019 .. 0 ' 1*23 43!* / COPY OF THE ORDER FORWARDED TO : 1. $5 / THE APPELLANT 2. 16$5 / THE RESPONDENT 3. + 7* / CIT 4. + 7* ( )/ THE CIT(A) 5. 38 1*9 , - 9 , :;<= / DR, ITAT, CHANDIGARH 6. < >, / GUARD FILE 0 + / BY ORDER, ? / ASSISTANT REGISTRAR