The Income-tax Officer, Pathankot V. M/s. T.K. Paper Mills, Pathankot

ITA 106/ASR/2014

• Counselvise Citation: 10620914 RSA 2014
• Duration Of Justice: 5 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-08-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 31-07-2014
• Assessment Year: 2010-2011
• Appeal Filed On: 19-02-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: SAMEER AGGARWAL
• Keywords: Capital receipt
• Section: 80IB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. BEFORE SH. A.D. JAIN, JUDICIAL MEMBER AND SH. B.P. JAIN, ACCOUNTANT MEMBER I.T.A. NO. 106(ASR)/2014 ASSESSMENT YEAR: 2010-11 PAN: AAEFT1532G INCOME TAX OFFICER, VS. M/S T.K. PAPER MILLS, WARD-3, PATHANKOT CHACK SAKTA, KATHUA, H.O.- PATHANKOT (APPELLANT) (RESPONDENT) APPELLANT BY: SH. TARSEM LAL, DR RESPONDENT BY: SAMEER AGGARWAL, CA DATE OF HEARING: 31.07.2014 DATE OF PRONOUNCEMENT: 05.08.2014 ORDER PER A.D. JAIN, J.M. 1. THIS IS DEPARTMENTS APPEAL FOR ASSESSMENT YEAR 2 010-11 AGAINST THE ORDER DATED 12.12.2013 PASSED BY LEARNE D CIT(A), AMRITSAR, DELETING THE DISALLOWANCE OF RS. 23,46,114/- MADE B Y THE ASSESSING OFFICER UNDER SECTION 80IB OF THE INCOME-TAX ACT, 1 961 (IN SHORT THE ACT), ON EXCISE DUTY REFUND, TREATING IT TO BE A R EVENUE RECEIPT NOT DIRECTLY ATTRIBUTABLE TO THE INDUSTRIAL ACTIVITIES OF THE ASSESSEES FIRM. 2. THE ASSESSING OFFICER MADE THE DISALLOWANCE IN O RDER TO FOLLOW THE CONSISTENCY OF THE STAND AS TAKEN BY THE DEPART MENT IN THE ASSESSEES 2 I.T.A. NO. 106(ASR)/2014 ASSESSMENT YEAR: 2010-11 OWN CASE FOR THE ASSESSMENT YEARS 2007-08 AND 2009- 10, THE DEPARTMENTS APPEALS FOR THESE ASSESSMENTS REMAININ G PENDING BEFORE THE HONBLE PUNJAB & HARYANA HIGH COURT. THE ASSESSING OFFICER ALSO OBSERVED THAT THE DECISION IN THE CASE OF M/S SHRE E BALAJI ALLOYS AND ORS. VS. CIT , 333 ITR 335 (J&K), WHICH HAS GONE I N FAVOUR OF THE ASSESSEE, HAD NOT BEEN ACCEPTED BY THE DEPARTMENT A ND THE DEPARTMENTS SPECIAL LEAVE PETITION WAS HITHERTO PENDING BEFORE THE HONBLE SUPREME COURT. 3. THE LEARNED CIT(A) DELETED THE DISALLOWANCE, FOLLOWING THE TRIBUNALS ORDER IN THE ASSESSEES CA SE FOR THE ASSESSMENT YEARS 2007-08 AND 2009-10. 4. CHALLENGING THE IMPUGNED ORDER, THE LEARNED DR H AS CONTENDED THAT THE LEARNED CIT(A) HAS ERRED IN DELE TING THE ADDITION CORRECTLY MADE BY THE ASSESSING OFFICER BY DISALLOWING THE DEDUCTION UNDER SECTION 80IB OF THE ACT, ON EXCISE DUTY REFUND, TREATING IT TO BE A REVENUE REC EIPT NOT DIRECTLY ATTRIBUTABLE TO THE INDUSTRIAL ACTIVITIES OF THE ASSESSEE; THAT WHILE DOING SO, THE LEARNED CIT(A) HAS ERRED I N FOLLOWING THE TRIBUNALS DECISION IN THE ASSESSEES CASE FOR THE ASSESSMENT YEARS 2007-08 AND 2009-10, WHICH DECISIO N HAS 3 I.T.A. NO. 106(ASR)/2014 ASSESSMENT YEAR: 2010-11 NOT BEEN ACCEPTED BY THE DEPARTMENT AND THE APPEAL FILED AGAINST THIS DECISION BEFORE THE HONBLE SUPREME CO URT IS STILL PENDING; AND THAT THE LEARNED CIT(A) HAS ERRED IN N OT APPRECIATING THE JUDGMENTS OF THE HONBLE SUPREME C OURT IN SAHNEY STEEL AND PRESS WORKS LTD. VS. CIT , 228 I TR 253 (SC) AND CIT VS. PONNY SUGARS AND CHEMICALS LTD. , 306 ITR 392 (SC); WHEREIN, THE HONBLE SUPREME COURT HA S HELD SUCH RECEIPTS TO BE REVENUE RECEIPTS. 5. THE LEARNED COUNSEL FOR THE ASSESSEE, ON THE OTH ER HAND, HAS PLACED STRONG RELIANCE ON THE IMPUGNED OR DER. 6. HAVING CONSIDERED THE RIVAL CONTENTIONS IN THE L IGHT OF THE MATERIAL PLACED ON RECORD, WE FIND THAT, IN THE ASSESSEES OWN CASE VIDE ORDER DATED 06.03.2012, FOR ASSESSMEN T YEARS 2007-08 AND 2009-10, PASSED IN ITA NO. 326 AND 327(ASR)/2011, THIS BENCH, WHILE DECIDING THE ISSUE AT HAND IN FAVOUR OF THE ASSESSEE, HAS FOLLOWED SHREE BALAJI ALLOYS (SUPRA), RENDERED BY THE HONBLE JURISDICTIONAL HIG H COURT OF JAMMU AND KASHMIR, SO FAR AS THE PRESENT CASE IS CO NCERNED. SHREE BALAJI ALLOYS (SUPRA) HOLDS, INTER ALIA, TH AT EXCISE DUTY REFUND IS A CAPITAL RECEIPT. THIS JUDGMENT, IT IS S EEN, HAS BEEN 4 I.T.A. NO. 106(ASR)/2014 ASSESSMENT YEAR: 2010-11 PASSED AFTER DULY TAKING INTO CONSIDERATION THE CAS ES OF SAHNEY STEEL AND PRESS WORKS LTD.(SUPRA) AND PON NY SUGARS AND CHEMICALS LTD.(SUPRA). THE ISSUE HAS BE EN DECIDED IN FAVOUR OF THE ASSESSEE FOLLOWING THE CAS E OF MEPCO INDUSTRIES LTD. VS. CIT, 319 ITR 208 (SC), WHEREIN, BOTH SAHNEY STEEL AND PRESS WORKS LTD.(SUPRA) AN D PONNY SUGARS AND CHEMICALS LTD. (SUPRA) WERE CONSIDERED. 7. AS SUCH, THE DEPARTMENT IS WRONG IN CONTENDING T HAT THE LEARNED CIT(A) HAS ERRED IN DECIDING THE ISSUE IN FAVOUR OF THE ASSESSEE BY FOLLOWING THE DECISION (SUPRA) OF T HE ITAT, AMRITSAR BENCH IN THE ASSESSEES OWN CASE FOR THE A SSESSMENT YEARS 2007-08 AND 2009-10, AND THAT THE LEARNED CIT (A) HAS ERRED IN NOT APPRECIATING THE CASES OF SAHNEY STEE L AND PRESS WORKS LTD.(SUPRA) AND PONNY SUGARS AND CHEMICALS LTD. (SUPRA). 8. THE TRIBUNAL ORDER (SUPRA) IN THE ASSESSEES OWN CASE FOR THE ASSESSMENT YEARS 2007-08 AND 2009-10, HAS N OT BEEN SHOWN TO HAVE BEEN EITHER CANCELLED, OR EVEN STAYED BY THE HONBLE HIGH COURT. 5 I.T.A. NO. 106(ASR)/2014 ASSESSMENT YEAR: 2010-11 9. FOR THE ABOVE DISCUSSION, THE GROUNDS TAKEN BY T HE DEPARTMENT ARE FOUND TO BE SHORN OF MERIT, AND ARE, HENCE, REJECTED. 10. THEREFORE, FINDING NO ERROR, WHATSOEVER THEREIN, THE LEARNED CIT(A)S ORDER UNDER APPEAL IS UPHELD. 11. IN THE RESULT, THE APPEAL FILED BY THE DEPARTMENT IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 5 TH AUGUST, 2014 SD/- SD/- (B.P. JAIN) (A.D. JAIN) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 5 TH AUGUST, 2014 /RK/ COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE: M/S T.K. PAPER MILLS, CHACK SAKTA, KA THUA, H.O.- PATHANKOT 2. ITO, WARD-3, PATHANKOT 3. THE CIT(A), 4. THE CIT, 5. THE SR DR, I.T.A.T., TRUE COPY BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH: AMRITSAR.