A.C.I.T.CC - III,kOL, Kolkata V. M/s Adhunik Meghalaya Steels (P) Ltd, Kolkata

ITA 1704/KOL/2012

• Counselvise Citation: 170423514 RSA 2012
• Duration Of Justice: 1 year(s) 7 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-07-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2007-2008
• Appeal Filed On: 21-11-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M L SARDAR
• Assessee Lawyers: RAJEEVA KUMAR
• Keywords: Capital receipt

Judgement Text

I.T.A. NO. 1704/KOL. /2012 ASSESSMENT YEAR: 2007-2008 PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA C BENCH, KOLKATA BEFORE SHRI SHAMIM YAHYA (ACCOUNTANT MEMBER), AND SHRI GEORGE MATHAN (JUDICIAL MEMBER) I.T.A. NO. 1704/KOL./ 2012 ASSESSMENT YEAR : 2007-2008 ASSISTANT COMMISSIONER OF INCOME TAX,.............. .........................APPELLANT CENTRAL CIRCLE-III, KOLKATA AAYAKAR BHAWAN (POORVA), 110, SHANTI PALLY, 3 RD FLOOR, KOLKATA-700 107 -VS.- M/S. ADHUNIK MEGHALAYA STEELS (P) LTD.,............ ..........RESPONDENT 14, NETAJI SUBHAS ROAD, 2 ND FLOOR, KOLKATA-700 001 [PAN : AADCA 0840 N] APPEARANCES BY: SHRI M.L. SARDAR, JCIT, SR. D.R., FOR THE DEPARTMEN T SHRI RAJEEVA KUMAR, ADVOCATE, FOR THE ASSESSEE DATE OF CONCLUDING THE HEARING : JULY 15, 2014 DATE OF PRONOUNCING THE ORDER : JULY 17, 2014 O R D E R PER GEORGE MATHAN: THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS), CENTRAL-1, KO LKATA IN APPEAL NO. 405/CC-III/CIT(A)C-1/KOL/09-10 DATED 27.09.2012 FOR THE ASSESSMENT YEAR 2007-08. 2. SHRI M.L. SARDAR, LD. JCIT, SR. D.R., REPRESENTE D ON BEHALF OF THE REVENUE AND SHRI RAJEEVA KUMAR, ADVOCATE, REPRESENT ED ON BEHALF OF THE ASSESSEE. 3. IN THE REVENUES APPEAL, THE REVENUE HAS RAISED THE FOLLOWING GROUNDS:- I.T.A. NO. 1704/KOL. /2012 ASSESSMENT YEAR: 2007-2008 PAGE 2 OF 4 (1) THAT THE LD. CIT(A) ERRED IN BOTH FACT AND LAW IN TREATING THE EXCISE DUTY REFUND AS CAPITAL RECEIPT IN THE HA NDS OF THE ASSESSEE INSTEAD OF REVENUE RECEIPT. (2) THAT THE LD.CIT(A) ERRED IN INTERPRETING THE JU DGMENT OF THE APEX COURT IN THE CASE OF PONNI SUGAR & CHEMICA LS LIMITED 306 ITR 392. 4. AT THE TIME OF HEARING, IT WAS SUBMITTED BY THE LD. A.R. THAT THE ISSUE IN APPEAL WAS SQUARELY COVERED BY THE DECISIO N OF THE COORDINATE BENCH OF THIS TRIBUNAL IN ASSESSEES OWN CASE FOR T HE ASSESSMENT YEAR 2006-07 5. LD. SR. D.R. VEHEMENTLY SUPPORTED THE ORDER OF T HE ASSESSING OFFICER. IT WAS THE SUBMISSION THAT THE EXCISE DUTY REFUND WAS LIABLE TO BE TREATED AS REVENUE RECEIPT AND NOT CAPITAL RECEIPT. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. A PERU SAL OF THE DECISION OF THE COORDINATE BENCH OF THIS TRIBUNAL IN ASSESSE ES OWN CASE FOR THE ASSESSMENT YEAR 2006-07 BEING IMMEDIATELY PRECEDING ASSESSMENT YEAR IN ITA NO. 731/KOL./2009 DATED 27.11.2009 SHOWS THA T ON AN IDENTICAL ISSUE, THE COORDINATE BENCH OF THIS TRIBUNAL HAS HE LD AS FOLLOWS:- 3.7. WE OBSERVE THAT THE LD. AR SUBMITTED THAT THE OUTSTANDING TERM LOAN WAS REDUCED BY PAYMENT OF THE AMOUNT OF REFUND OF EXCISE DUTY AND ACCORDINGLY, THE ASSES SEE HAD UTILIZED THE EXCISE DUTY REFUND TOWARDS REPAYMENT O F TERM LOAN. THE LD. DR DURING THE COURSE OF HEARING HAS NOT DIS PUTED THE ABOVE CONTENTION OF THE LD. AR. WE ARE OF THE CONSI DERED VIEW THAT IF THE REFUND OF EXCISE DUTY IS UTILIZED FOR S ETTING UP OR EXPANSION OF INDUSTRY IN THE BACKWARD AREA. IT IS A CAPITAL RECEIPT, AS HELD BY THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF BALARAMPUR CHINI MILLS LTD. (SUPRA). THE HO NBLE SUPREME COURT IN THE CASE OF PONNI SUGARS & CHEMICA LS LTD. (SUPRA) HAS HELD THAT THE CHARACTER OF THE RECEIPTS IN THE HANDS OF THE ASSESSEE HAS TO BE DETERMINED WITH RESPECT T O THE PURPOSE FOR WHICH THE SUBSIDY IS GIVEN. THE POINT O F TIME ON WHICH THE SUBSIDY IS PAID IS NOT RELEVANT. IT WAS H ELD BY THEIR LORDSHIPS OF HONBLE SUPREME COURT THAT IF THE OBJE CT OF THE SUBSIDY SCHEME WAS TO ENABLE THE ASSESSEE TO RUN TH E BUSINESS MORE PROFITABLY, THEN THE RECEIPT IS ON REVENUE ACC OUNT AND, ON THE OTHER HAND, IF THE OBJECT OF THE ASSISTANCE UND ER THE SUBSIDY I.T.A. NO. 1704/KOL. /2012 ASSESSMENT YEAR: 2007-2008 PAGE 3 OF 4 SCHEME WAS TO ENABLE THE ASSESSEE TO SET UP A NEW U NIT OR TO EXPAND THE EXISTING UNIT, THEN THE RECEIPT OF THE S UBSIDY WAS ON CAPITAL ACCOUNT. THE FORM OF MECHANISM THROUGH WHIC H THE SUBSIDY IS GIVEN IS RELEVANT. 3.8. CONSIDERING THE ABOVE DECISIONS, WE FIND SUBST ANCE IN THE SUBMISSION OF THE LD. AR THAT THE REFUND OF EXCISE DUTY OF RS.1,97,28,534/- IS THE CAPITAL RECEIPT IN THE HAND S OF THE ASSESSEE. HOWEVER, THE RELEVANT FACTS TO SUBSTANTIA TE THE ABOVE CONTENTION OF THE LD. AR ARE NOT ON RECORD. THEREFO RE, WE DIRECT THE AO TO OBTAIN THE REQUISITE DETAILS FROM THE ASS ESSEE AND IF THE SAID REFUND OF EXCISE DUTY OF RS.1,97,28,534/- HAS BEEN UTILIZED BY THE ASSESSEE FOR REPAYMENT OF THE TERM LOAN TAKEN BY IT FOR SETTING UP OF THE INDUSTRIAL UNDERTAKING/ EXPANSION OF THE INDUSTRIAL UNIT, THE SAID AMOUNT BE CONSIDERED AS CAPITAL RECEIPT. SUBJECT TO ABOVE OBSERVATION, WE UPHOLD TH E ORDER OF THE LD. CIT(A) AND REJECT THE GROUND OF APPEAL TAKE N BY THE DEPARTMENT. 7. IN THESE CIRCUMSTANCES, RESPECTFULLY FOLLOWING T HE DECISION OF THE COORDINATE BENCH OF THIS TRIBUNAL AS EXTRACTED ABOV E AS IT IS NOTICED THAT THE LD. CIT(APPEALS) HAS FOLLOWED JUDICIAL DISCIPLI NE IN FOLLOWING THE DECISION OF THE COORDINATE BENCH OF THIS TRIBUNAL I N ASSESSEES OWN CASE REFERRED TO SUPRA, THE FINDING OF THE LD. CIT(APPEA LS) STANDS CONFIRMED. 8. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 17 TH JULY, 2014. SD/- SD/- SHAMIM YAHYA GEORGE MATHAN (ACCOUNTANT MEMBER) (JU DICIAL MEMBER) KOLKATA, THE 17 TH DAY OF JULY, 2014 COPIES TO : (1) ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-III, KOLKATA AAYAKAR BHAWAN (POORVA), 110, SHANTI PALLY, 3 RD FLOOR, KOLKATA-700 107 (2) M/S. ADHUNIK MEGHALAYA STEELS (P) LTD. 14, NETAJI SUBHAS ROAD, 2 ND FLOOR, KOLKATA-700 001 I.T.A. NO. 1704/KOL. /2012 ASSESSMENT YEAR: 2007-2008 PAGE 4 OF 4 (3) COMMISSIONER OF INCOME-TAX (APPEALS) (4) COMMISSIONER OF INCOME TAX (5) THE DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCHES, KOLKATA LAHA/SR. P.S.