The Income-tax Officer, Jammu V. Sh. Amit Jain, Jammu

ITA 236/ASR/2012

• Counselvise Citation: 23620914 RSA 2012
• Duration Of Justice: 2 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-08-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 08-08-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 29-05-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Gift; Capital receipt

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. 236(ASR)/2012 ASSESSMENT YEAR:2006-07 PAN :AFQPJ4253D INCOME TAX OFFICER, VS. SH. AMIT JAIN, WARD 1(1), JAMMU. 19/6, NANAK NAGAR, JAMMU. (APPELLANT) (RESPONDENT) APPELLANT BY:SH.TARSEM LAL, DR RESPONDENT BY:NONE DATE OF HEARING: 08 /08/2012 DATE OF PRONOUNCEMENT:08/08/2012 ORDER PER BENCH ; THE REVENUE HAS FILED THE PRESENT APPEAL AGAINST THE IMPUGNED ORDER OF THE CIT(A), JAMMU, DATED 20.03.2012 FOR THE ASSE SSMENT YEAR 2006-07 ON THE FOLLOWING GROUNDS: 1 ON THE FACTS AND CIRCUMSTANCES WHETHER THE LD. CIT(A) WAS RIGHT IN ALLOWING RELIEF ON ACCOUNT OF INTEREST SUBSIDY & INSURANCE SUBSIDY BY RELYING UPON ORDERS OF HON'BLE HIGH COUR T IF J&K, JAMMU WHICH HAS BEEN DELIVERED NOT ON MERITS OF THE ISSUE BUT HOLDING THE RECEIPT TO BE A CAPITAL RECEIPT ONLY BECAUSE THE PO LICY UNDER WHICH THE SAME WAS PAID ENVISAGED TACKLING THE UNEMPLOYMENT I N THE STATE ITA NO.236(ASR)/2012 2 WHICH CANNOT BE SAID TO BE A GOOD TEST FOR DECIDING WHETHER A RECEIPT IS A TRADING RECEIPT OR A CAPITAL RECEIPT. 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. C IT(A) WAS RIGHT IN DELETING THE ADDITION OF RS.43,50,000/- MA DE ON PROTECTIVE BASIS ON ACCOUNT OF UNEXPLAINED CREDITS IN CAPITAL ACCOUNT OF THE ASSESSEE WHEN NO RETURN OF INCOME HAS BEEN FILED A ND NO BOOKS OF ACCOUNT WERE PRODUCED BY THE DONOR M/S. D.S. INDUST RIES WHO HAS GIVEN GIFT TO THE ASSESSEE BEING A PARTNERSHIP CONC ERN OF ASSESSEES FATHER & BROTHER. 6. THE APPELLANT CRAVES TO AMEND OR ADD ANY ONE OR MORE GROUNDS OF APPEAL. ITA NO.236(ASR)/2012 3 2. AFTER HEARING THE LD. DR AND PERUSING THE RELEVA NT RECORDS AVAILABLE WITH US, WE ARE OF THE VIEW THAT THE ISSUES INVOL VED IN GROUNDS NO. 1 TO 4 RELATE TO INTEREST SUBSIDY AND INSURANCE SUBSIDY AN D THE LD. FIRST APPELLATE AUTHORITY HAD DELETED BOTH THE ADDITIONS BY RESPECT FULLY FOLLOWING THE DECISION OF THE JURISDICTIONAL HIGH COURT OF J & K IN THE CASE OF SHREE BALAJI ALLOYS VS. CIT AND ANOTHER (2011) 333 ITR 335 (J&K) WHERE THE HONBLE HIGH COURT HAS HELD THAT THESE ARE CAPITAL RECEIPTS AND THE SAME ARE NOT TAXABLE. THE ISSUES INVOLVED IN THE PRESENT APPEA L ARE SIMILAR, WHICH THE HONBLE HIGH COURT HAS DECIDED IN FAVOUR OF THE ASS ESSEE, IN THE AFORESAID CASE. THEREFORE, KEEPING IN VIEW THE FACTS AND CIR CUMSTANCES OF THE PRESENT CASE AND THE ISSUES IN DISPUTE AS WELL AS THE DECIS ION RENDERED BY THE JURISDICTIONAL HIGH COURT IN THE CASE OF SHREE BA LAJI ALLOYS V. CIT AND ANOTHER (SUPRA), WE ARE OF THE VIEW THAT THE LD. FI RST APPELLATE AUTHORITY HAS PASSED A WELL REASONED ORDER BY FOLLOWING THE AFOR ESAID DECISION OF THE JURISDICTIONAL HIGH COURT. ACCORDINGLY, WE DISMISS GROUNDS NO.1 TO 4 OF THE REVENUE BY UPHOLDING IMPUGNED ORDER. 3. AS REGARDS THE ISSUE RAISED BY THE REVENUE IN GR OUND NO.5 RELATING TO DELETION OF ADDITION OF RS.43,50,000/- MADE ON PROT ECTIVE BASIS ON ACCOUNT OF UNEXPLAINED CREDITS IN CAPITAL ACCOUNT OF THE AS SESSEE, THE LD. DR, STATED THAT THE APPEAL ON THIS ISSUE IS PENDING BEFORE THE LD. FIRST APPELLATE AUTHORITY ITA NO.236(ASR)/2012 4 IN THE CASE OF M/S. D.S. INDUSTRIES AND THE LD. FIR ST APPELLATE AUTHORITY HAS WRONGLY VACATED THE PROTECTIVE ASSESSMENT IN THE HA NDS OF THE ASSESSEE AND DIRECTED THE AO TO INITIATE ANY ACTION AS PER LAW IN THE CASE OF M/S. D.S. INDUSTRIES. KEEPING IN VIEW THE STATEMENT MADE BY S H. TARSEM LAL, LD. DR, WE ARE OF THE VIEW THAT AS THE MATTER REGARDING THE ISSUE IN DISPUTE IS PENDING BEFORE THE LD. CIT(A) IN THE CASE OF M/S. D.S. INDU STRIES, THE ISSUE IN DISPUTE OF THE PRESENT ASSESSEE, MAY BE DECIDED TOGETHER WI TH THE ISSUE OF M/S. D.S. INDUSTRIES, IN ACCORDANCE WITH LAW. ACCORDINGLY, TH IS ISSUE IS RESTORED TO THE FILE OF THE LD. CIT(A) WITH THE DIRECTION TO DECIDE THE SAME ALONGWITH THE CASE OF M/S. D.S. INDUSTRIES, AFTER AFFORDING OPP ORTUNITY TO THE ASSESSEE. 4. IN THE RESULT, THE APPEAL OF THE REVENUE IN ITA NO.236(ASR)/2012 IS PARTLY ALLOWED FOR STATISTICAL PURPOSES AS INDICATE D ABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON 8TH AUGUST, 2012. (B.P. JAIN) (H.S. SIDHU) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 8 TH AUGUST, 2012 /SKR/ COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE:SH. AMIT JAIN, JAMMU 2. THE WARD 1(1), JAMMU 3. THE CIT(A), JAMMUS 4. THE CIT, JAMMU 5. THE SR DR, ITAT, AMRITSAR.