M/s. Opal Cements P.Ltd., Srinagar V. The ACIT, Srinagar

ITA 171/ASR/2012

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 5349 (ITAT-AMRITSAR)
• Duration Of Justice: 1 year(s) 9 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-02-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 25-02-2014
• Assessment Year: 2005-2006
• Appeal Filed On: 01-05-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• 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. 171(ASR)/2012 ASSESSMENT YEAR: 2005-06 PAN: AABFO0599B M/S OPAL CEMENTS(PVT) LTD, VS. ACIT (CIRCLE), SRI NAGAR KENG BUILDING, RESIDENCY ROAD, KASHMIR SRINAGAR, KASHMIR (APPELLANT) (RESPONDENT) APPELLANT BY: NONE RESPONDENT BY: SH. MAHAVIR SINGH, SR.DR DATE OF HEARING: 25.02.2014 DATE OF PRONOUNCEMENT: 26.02.2014 ORDER PER BENCH 1. THE ASSESSEE HAS FILED THE PRESENT APPEAL AGAINST THE IMPUGNED ORDER DATED 28.11.2011 PASSED BY LEARNED CIT(A), JA MMU, FOR THE ASSESSMENT YEAR 2005-06 ON THE FOLLOWING GROUNDS: I. ON THE LAW AND FACTS OF THE CASE, THE HON'BLE CIT(A ) WAS NOT JUSTIFIED IN HOLDING THAT FREIGHT SUBSIDY WAS NOT A N INCOME DERIVED FROM INDUSTRIAL UNDERTAKING AND HENCE NOT ENTITLED TO DEDUCTION U/S 80IB OF THE I.T. ACT. II. THE HON'BLE CIT(A) WAS NOT JUSTIFIED IN IGNORING TH E PLEA OF THE APPELLANT ASSESSEE THAT ONLY NET FREIGHT SUBSIDY (T OTAL FREIGHT SUBSIDY MINUS ACTUAL FREIGHT INCURRED) BE CONSIDERE D FOR AD-BACK. III. THE HON'BLE CIT(A) WAS NOT JUSTIFIED IN UPHOLDING T HE ASSESSMENT OF INCOME OF APPELLANT ASSESSEE BY ASSESSING AUTHOR ITY AT RS. 19,34,840/- AS AGAINST A NIL INCOME RETURNED BY HIM . IV. THE APPELLANT CRAVES LEAVE TO ADD, AMEND, ALTER OR SUBSTITUTE ANY OTHER GROUND NECESSARY TO MEET ENDS OF JUSTICE. 2 I.T.A. NO. 171(ASR)/2012 ASSESSMENT YEAR: 2005-06 2. NOTICE OF HEARING FOR 25.02.2014 WAS ISSUED TO THE ASSESSEE BY RPAD IN SPITE OF THE SAME NEITHER ASSESSEE NOR ITS AUTHORIZED REPRESENTATIVE APPEARED NOR FILED ANY APPLICATION F OR ADJOURNMENT. THEREFORE, WE ARE OF THE VIEW THAT THE ASSESSEE IS NOT INTERESTED TO PROSECUTE THE MATTER IN DISPUTE. 3. KEEPING IN VIEW THE FACTS AND CIRCUMSTANCES OF T HE PRESENT CASE, WE ARE OF THE VIEW THAT NO USEFUL PURPOSE WOU LD BE SERVED TO ADJOURN THE MATTER AGAIN AND AGAIN. THEREFORE, WE P ROCEED TO DECIDE THE ISSUE IN DISPUTE AFTER HEARING LEARNED DR AND EX-PA RTE ASSESSEE. 4. AT THE TIME OF HEARING, LEARNED DR STATED THAT T HE ISSUE IN DISPUTE HAS BEEN DECIDED IN FAVOUR OF THE REVENUE A ND AGAINST THE ASSESSEE BY LEARNED CIT(A) BY RESPECTFULLY FOLLOWIN G THE JUDGMENT OF HON'BLE HIMACHAL PRADESH HIGH COURT AS WELL AS HON' BLE SUPREME COURT OF INDIA. THEREFORE, THE APPEAL FILED BY THE ASSESS EE MAY BE DISMISSED. 5. WE HAVE THOROUGHLY GONE THROUGH THE IMPUGNED ORD ER AS WELL AS THE ORDER PASSED BY THE REVENUE AUTHORITY AND WE ARE OF THE CONSIDERED VIEW THAT THE LEARNED FIRST APPELLATE AUTHORITY HAD DECIDE THE ISSUE IN DISPUTE IN FAVOUR THE REVENUE AND AGAINST THE ASSES SEE IN PARA NO. 5 AT PAGE NOS. 2 & 3, WHICH IS REPRODUCED AS UNDER: I HAVE CAREFULLY CONSIDERED THE SUBMISSION OF THE LEARNED A/R AND HAS GONE THROUGH THE RELEVANT JUDICIAL PRONOUNCEMEN T AS WELL AS THE MATERIAL ON RECORDS. I HAVE ALSO HAD THE BENEFIT OF HAVING THE JUDICIAL 3 I.T.A. NO. 171(ASR)/2012 ASSESSMENT YEAR: 2005-06 PRONOUNCEMENTS BY THE HON'BLE HIGH COURT OF HIMACHA L PRADESH IN CASE OF M/S KIRAN ENTERPRISES 32 DTR 11/228 CTR-101 ON THE ISSUE OF TREATMENT OF TRANSPORT SUBSIDY FOR THE PURPOSE OF DEDUCTION U/S 80IB OF THE I.T. ACT. I ALSO HAVE BEFORE ME ANOTHER RECENT DECISION OF HON'BLE HIMACHAL PRADESH HIGH COURT IN CASE OF M/S MAHARANI PACKAGING (P) LTD. DIRECT ON THE ISSUE OF FREIGHT S UBSIDY. BOTH THE DECISION ARE DIRECTLY ON THIS ISSUE AND IN THOSE DE CISIONS THE ELABORATE DISCUSSIONS ARE MADE OF THE JUDGMENTS OF HON'BLE SU PREME COURT IN M/S CAMBAY ELECTRIC SUPPLY INDUSTRIAL CO. 113-ITR- 84 (SC) AND STERLING FOODS 237-ITR-579 (SC) AND M/S LIBERTY IND IAN WHICH IS IN RESPECT OF DEPB BENEFITS AND DUTY DRAWBACK, REPORTE D IN 317 ITR 219. THE DECISION MADE BY THE HON'BLE HIGH COURT AS ABOVE HAVE DISCUSSED AS TO HOW THE TRANSPORT SUBSIDY IS NOT A PROFIT DERIVED FROM THE BUSINESS SINCE IT IS NOT AN OPERATIONAL PROFIT BUT THE SOURCE OF THE SUBSIDY IS THE SCHEME OF THE GOVERNMENT OF INDIA AN D NOT THE BUSINESS OF ASSESSEE. THE DECISION OF HON'BLE HIMACHAL PRADE SH HIGH COURT IN THE CASE OF M/S MAHARANI PACKING (P) LTD. HAS ALSO DISCUSSED THE CASE OF CIT VS. ANDAMAN TIMBER INDUSTRIES 242 ITR-2 04 (CAL.) AS UNDER: 12. IN CIT VS. ANDAMAN TIMBER INDUSTRIES LTD. (200 0) 158 CTR (CAL.); (2000) 242 ITR 204 (CAL.), THE ASSESSEE HAD CLAIMED THE BENEFIT OF S. 80HH ON PROFITS AND GAINS DERIVED FROM THE INDUSTRIAL UNDERTAKING AND HAD INCLUDED TH E AMOUNT PAID TO IT UNDER THE TRANSPORT SUBSIDY SCHEME. THE CALCUTTA HIGH COURT REFERRED TO THE JUDGMENT OF THE APEX COU RT CITED HEREINABOVE AND HELD THAT THE TRANSPORT SUBSIDY IS NOT DERIVED FROM THE ACTIVITY OF THE INDUSTRIAL UNDERTAKING TH OUGH IT MAY BE ATTRIBUTABLE TO IT AND THEREFORE CANNOT BE SAID TO BE TREATED AS PART OF THE PROFITS AND GAINS DERIVED FROM THE INDU STRIAL UNDERTAKING. 6(A) AFTER THE DISCUSSIONS AS ABOVE, THE HON'BLE H IGH COURT OF H.P. CONCLUDED THAT THE DEDUCTION IS AVAILABLE U/S 80IB OF THE I.T. ACT ON THE AMOUNT OF FREIGHT SUBSIDY. NO OTHER JUDGMENT IN FAVOUR OF THE ASSESSEE ON THE ISSUE IS BROUGHT TO MY NOTICE BY TH E A/R NOR I HAVE COME ACROSS ON MY OWN, SUCH A JUDGMENT. IT IS ALSO NOT ARGUED AS TO HOW THE JUDGMENT IS NOT TO BE APPLIED TO THE FACTS OF THE CASE. IN VIEW OF THE ABOVE RESPECTFULLY FOLLOWING THE JUDGMENT OF HON'BLE HIMACHAL PRADESH AS REFERRED ABOVE IN THE VIEW OF THE FACT T HAT NO CONTRARY JUDGMENT IS AVAILABLE BEFORE ME. I HOLD THAT NO DED UCTION U/S 80IB OF 4 I.T.A. NO. 171(ASR)/2012 ASSESSMENT YEAR: 2005-06 THE I.T. ACT IS AVAILABLE TO ASSESSEE ON THE AMOUNT OF FREIGHT SUBSIDY RECEIVED. THE ORDER OF A.O. IS AFFIRMED/CONFIRMED. 6. KEEPING IN VIEW THE IMPUGNED ORDER, REPRODUCED A BOVE, WE ARE OF THE VIEW THAT THE LEARNED FIRST APPELLATE AUTHOR ITY HAS RIGHTLY DECIDED THE ISSUE IN DISPUTE IN FAVOUR OF THE REVENUE AND A GAINST THE ASSESSEE BY RESPECTFULLY FOLLOWING THE VARIOUS DECISIONS/JUDGME NTS RENDERED BY HON'BLE HIGH COURTS AND HON'BLE SUPREME COURT, AS M ENTIONED IN THE IMPUGNED ORDER, AND PASSED A WELL REASONED ORDER. T HUS, NO INTERFERENCE IS CALLED FOR IN THE IMPUGNED ORDER DATED 28.11.201 1 PASSED BY LEARNED CIT(A), JAMMU, AND WE UPHOLD THE SAME BY DISMISSING THE APPEAL FILED BY THE ASSESSEE. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 26 TH FEBRUARY, 2014 SD/./- SD/./- (B.P. JAIN) (H.S. SIDHU) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 26 TH FEBRUARY, 2014 /RK/ COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE: M/S OPAL CEMENTS(PVT) LTD, KENG BUIL DING, RESIDENCY ROAD, SRINAGAR, KASHMIR 2. ACIT (CIRCLE), SRINAGAR, KASHMIR 3. THE CIT(A), 4. THE CIT, 5. THE SR DR, I.T.A.T., TRUE COPY BY ORDER 5 I.T.A. NO. 171(ASR)/2012 ASSESSMENT YEAR: 2005-06 (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH: AMRITSAR.