The Income-tax Officer, Kathua V. M/s. Jammu Metchem Pvt. Ltd, Kathua

ITA 137/ASR/2012

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 7729 (ITAT-AMRITSAR)
• Duration Of Justice: 2 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-07-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 27-06-2012
• Assessment Year: 2009-2010
• Appeal Filed On: 01-05-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department 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. 137(ASR)/2012 ASSESSMENT YEAR:2009-10 PAN :AABCJ6960C INCOME TAX OFFICER, VS. M/S. JAMMU METCHEM PVT. LT D. KATHUA. KATHUA. (APPELLANT) (RESPONDENT) APPELLANT BY:SH. R.L. CHHANALIA, DR RESPONDENT BY:SH. SUSHIL KUMAR, ADV. DATE OF HEARING:27/06/2012 DATE OF PRONOUNCEMENT:03/07/2012 ORDER PER BENCH ; THE REVENUE HAS FILED THE PRESENT APPEAL AGAINST T HE ORDER OF THE CIT(A), JAMMU, DATED 23.02.2012 FOR THE ASSESSMENT YEAR 2009-10 ON THE FOLLOWING GROUNDS: 1 ON THE FACTS AND CIRCUMSTANCES WHETHER THE LD. CIT(A) WAS RIGHT IN ALLOWING RELIEF ON ACCOUNT OF DEDUCTIO N U/S 80IB ON CENTRAL EXCISE DUTY REFUND BY RELYING UPON ORDERS O F HON'BLE HIGH COURT IF J&K, JAMMU WHICH HAS BEEN DELIVERED NOT O N MERITS OF THE ISSUE BUT HOLDING THE RECEIPT TO BE A CAPITAL RECEI PT ONLY BECAUSE THE POLICY UNDER WHICH THE SAME WAS PAID ENVISAGED TACK LING THE UNEMPLOYMENT IN THE STATE WHICH CANNOT BE SAID TO B E A GOOD TEST FOR DECIDING WHETHER A RECEIPT IS A TRADING RECEIPT OR A CAPITAL RECEIPT. ITA NO.137(ASR)/2012 2 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. 5. ON THE FACTS AND CIRCUMSTANCES WHETHER THE LD. CIT( A) WAS RIGHT IN DELETING THE DISALLOWANCE MADE U/S 36(1)(III) ON ACCOUNT OF BANK INTEREST FOR NON BUSINESS ADVANCES WHEN THE BUSINES S TRANSACTION MADE BY THE ASSESSEE WITH OTHER CONCERN IS LESS THAN THE ADVANCES/LOANS MADE. 2. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE R ELEVANT MATERIAL AVAILABLE WITH US. WE ARE OF THE VIEW THAT AS REGA RDS THE ISSUE INVOLVED IN GROUND NO. 1 TO 4 RELATING TO DEDUCTION UNDER SECT ION 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 ITA NO.137(ASR)/2012 3 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. 2.1. 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 (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. 3. AS REGARDS GROUND NO.5 RELATING TO DELETION OF D ISALLOWANCE MADE U/S 36(1)(III) ON ACCOUNT OF BANK INTEREST FOR NON BUSI NESS ADVANCES. 3.1. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSE D THE MATERIAL AVAILABLE ON RECORD. WE HAVE ALSO GONE THROUGH THE ORDER OF THE LD. FIRST APPELLATE AUTHORITY AND FOUND THAT THE LD. FIRST A PPELLATE AUTHORITY HAS DECIDED THE ISSUE IN DISPUTE ON THE BASIS OF THE D ECISION RENDERED BY THE HONBLE SUPREME COURT IN THE CASE OF M/S. S.A. BUIL DERS 288 ITR 1(SC). THE HONBLE SUPREME COURT IN THE CASE OF S.A. BUILD ERS (SUPRA) HAS HELD AS UNDER: ITA NO.137(ASR)/2012 4 THE REVENUE CANNOT JUSTIFIABLE CLAIM TO PUT ITSELF IN THE ARM CHAIR OF THE BUSINESSMAN OR IN THE POSITION OF THE BOARD OF AND ASSUME THE ROLE TO DECIDE HOW MUCH REASONABLE EXPENDITURE HAVING RE GARD TO THE CIRCUMSTANCES OF THE CASE. NO BUSINESS MAN CAN BE C OMPELLED TOP MAXIMIZE HIS PROFIT. 3.2. IN VIEW OF THE ABOVE , WE ARE OF THE CONSIDERED VIEW THAT THE CASE OF S.A. BUILDERS (SC) (SUPRA) RELIED UPON BY THE LD. F IRST APPELLATE AUTHORITY IS SQUARELY APPLICABLE TO THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE AND THE LD. FIRST APPELLATE AUTHORITY HAS RIGHTLY DELETED T HE ADDITION. ACCORDINGLY, WE UPHOLD THE ORDER OF THE CIT(A) AND DISMISS THIS GRO UND OF THE REVENUE. 4. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I N ITA NO.137(ASR)/2012 IS 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. JAMMU METCHEM PVT. LTD. KATHUA. 2. THE ITO KATHUA. 3. THE CIT(A) 4. THE CIT 5. THE SR DR, ITAT, AMRITSAR. TRUE COPY BY ORDER ITA NO.137(ASR)/2012 5 (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH: AMRITSAR.