Smt. Megha Dadoo, Sirmour V. ITO, Nahan

ITA 21/CHANDI/2020

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 5886 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 1 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-02-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2015-2016
• Appeal Filed On: 06-01-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Capital receipt
• Section: 115JB

Judgement Text

आयकर अपील य अ धकरण,च डीगढ़ यायपीठ “बी” , च डीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH “B”, CHANDIGARH ी एन.के .सैनी, उपा य! एवं ी आर.एल. नेगी, या$यक सद&य BEFORE: SHRI. N.K.SAINI, VP & SHRI , R.L. NEGI, JM Miscellaneous Application No. 21/Chd/2020 ( ITA No. 1287/Chd/2018) Assessment Year : 2013-14 M/s Steel Strips Wheels Limited SCO-49-50, Sector 26 Chandigarh The DCIT CC-II, Sector 17E Chandigarh PAN NO: AACCS3003L Appellant Respondent ! " Assessee by : Shri Ashwani Kumar, CA # ! " Revenue by : Smt. Meenakshi Vohra, Addl. CIT $ % ! & Date of Hearing : 27/01/2021 '()* ! & Date of Pronouncement : 15/02/2021 आदेश/Order PER N.K. SAINI, VICE PRESIDENT This Miscellaneous Application arising out of the order dt. 27/02/2020 in Appeal No. 1287/Chd/2018 for the A.Y. 2013-14 has been filed by the assessee stating therein as under: RESPECTFULLY SHOWETH 1. That the above titled appeal in ITA no.1287/Chd/2018 for AY 2013-14 was listed for hearing before this Hon'ble Tribunal on 21 st of January 2020 and the order was pronounced by the Hon'ble Bench on 27 th of February 2020. 2. That the appellant had raised two grounds of appeal which read as under: 1. That the Ld. CIT(Appeals) has grossly erred in law as well as on facts in confirming the disallowance of Rs. 225 lacs on account of Electricity Duty Exemption entitlement treating the same as revenue receipt, whereas the same is 2 in the nature of capital receipt. Therefore, the addition of Rs. 225 lacs may kindly be deleted and claim of the assessee please be allowed. 2. That the Ld. CIT(Appeals) has grossly erred in law as well as on facts in confirming the disallowance of claim of the assessee for Rs. 560.12 lacs on account of sales tax subsidy and Rs. 225 lacs on account of entitlement to Electricity Duty Exemption as deduction from the Book Profits u/s 115JB being in the nature of capital receipts. The deduction of Rs. 560.12 lacs and Rs. 225 lacs may kindly be allowed from the Book Profits u/s 115JB. 3. That the Hon'ble Bench dealt with in detail the merits of ground No. 1 and allowed the same in favour of the appellant vide £^24 of the impugned order. 4. That in para 25, the Hon'ble Bench held that Ground No. 2 is consequential to Ground No. 1 of the appellant's appeal and so it does not require any adjudication on the part of the Bench. 5. That fact of the matter is that Ground No. 2 was specifically argued by the appellant's counsel and the appellant had relied on decision of the Hon'ble Bench in appellant's own case for AY 2012-13 in ITA No. 730/Chandi/2018 dated 27.05.2019. That specific attention was drawn to the decision of the Hon'ble Bench to paras 27 to 33 of the order dated 27.05.2019 in ITA No. 730/Chandi/2018. 6. That while adjudicating Ground No. 2, it has been inadvertently held that the same is consequential but as specific submissions were made with respect to the ground, separate adjudication of the same was warranted. That the mistake being apparent from record, deserves to be rectified. 7. That a copy of the tax challan for Rs.50/- as the required fee is enclosed as Annexure -1. 8. That the copy of the order dated 27.02.2020 by the Hon'ble ITAT in case of assesse is enclosed as Annexure - 2. It is, therefore, most respectfully prayed that in view of what has been stated above, the present miscellaneous application be allowed as above, in the interest of Justice. 2. During the course of hearing the Ld. Counsel for the Assessee reiterated the contents of the above application and submitted that the specific Ground No. 2 relating to sales tax subsidy was raised, however, inadvertently it was held that it is consequential in nature. It was further submitted that this issue was 3 squarely covered in favour of the assessee vide order dt. 27/05/2019 in assessee’s own case in ITA No. 730/Chd/2018 for the Assessment Year 2012-13 vide para 31 to 33 (copy of the said order was furnished which is placed on record). 3. The aforesaid contention of the Ld. Counsel for the Assessee was not controverted by the Ld. Sr. DR. 4. After considering the submissions of both the parties and the material available on the record, it is noticed that inadvertently the ground number 2 raised by the assessee was held to be consequential to ground no. 1. However, the issue raised in the said ground was independent and is squarely covered in assessee’s favour vide earlier order dt. 27/05/2019 in assessee’s own case in ITA No. 730/Chd/2018 for the A.Y. 2012-13 wherein the relevant findings have been given in para 31 to 33 which read as under: “31. We have heard the rival contentions. The issue to be adjudicated is whether sales tax subsidy is to be reduced while computing the Book Profits for the purposes of levying Miminum Alternate Tax (MAT) as per the provisions of section 115JB of the Act. 32. We have gone through the order of the ITAT in the case of H.M Steels, cited by the Ld.Counsel for the assessee before us. We find that identical issue has been dealt with by the ITAT in the said case holding the VAT subsidy ,being capital in nature, as not includible in the Book Profits u/s 115JB of the Act. The ITAT ,while holding so has taken note of the decision of the Hon’ble apex court in the case of Apollo Tyres (supra) as per which any adjustment to the Profit and Loss account prepared by the assessee was ruled out for the purposes of calculating the Book Profit amenable to tax. The ITAT held as per section 115JB the profit and loss account prepared should be in accordance with Part II & III of Schedule VI to the Companies Act,1956 and therefore adjustments to the same can be made to make it compliant with the Schedule. The ITAT accordingly held that Sales tax/VAT subsidy being capital in nature would have to be reduced from the profits. 33. The fact in the case before us, we find is identical to that in H.M Steels ,with the Sales tax subsidy having been held to be capital in nature. In view of the same ,the issue we hold is squarely covered by the decision of the ITAT in the case of H.M Steels, following which we hold that the sales tax subsidy is to be reduced from the Book Profits for the purposes of paying tax u/s 115JB of the Act. The ground of appeal raised by the assessee is accordingly allowed.” 4 In effect the appeal of the assessee is allowed. So respectfully following the aforesaid referred to order the issue is decided in favour of the assessee. This order is to be read as part of the order dt. 27/02/2020. 5. In the result, Misc. Application filed by the Assessee is allowed. Order pronounced in the Court on 15/02/2021. . Sd/- Sd/- आर.एल. नेगी एन.के .सैनी, (R.L. NEGI ) ( N.K. SAINI) या$यक सद&य/ Judicial Member उपा य! / VICE PRESIDENT AG Date: 15/02/2021 ( + ! , - . - Copy of the order forwarded to : 1. The Appellant 2. The Respondent 3. $ / CIT 4. $ / 0 1 The CIT(A) 5. - 2 ग 4 5 & 4 5 678 ग9 DR, ITAT, CHANDIGARH 6. ग 8 : % Guard File