DCIT, Jammu V. M/s. Kashmir Steel Rolling Mills, Jammu

ITA 237/ASR/2015

• Counselvise Citation: 23720914 RSA 2015
• Duration Of Justice: 6 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-12-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 20-05-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K V K SINGH
• Assessee Lawyers: SUBASH DUTT
• Keywords: Capital receipt
• Section: 80IB; 154; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL JAMMU CAMP; JAMMU BEFORE SH. A.D.JAIN, HONBLE JUDICIAL MEMBER AND SH. T.S.KAPOOR, HONBLE ACCOUNTANT MEMBER I.T.A. NO 398(ASR)/2015 ASSESSMENT YEAR:2012-13 THE DCIT, CIRCLE-1, JAMMU. VS. M/S SINGLA CABLES, LANE NO.2, PHASE II SIDCO INDUSTRIAL COMPLEX, BARI BRAHMANA PAN: AAQFS 9604 Q (APPELLANT) (RESPONDENT) CROSS OBJECTION NO. 23/ASR/2015 [A/O I.T.A. NO 398(ASR)/2015] ASSESSMENT YEAR:2012-13 M/S SINGLA CABLES, LANE NO.2, PHASE II SIDCO INDUSTRIAL COMPLEX, BARI BRAHMANA PAN: AAQFS 9604 Q VS. THE DCIT, CIRCLE-1, JAMMU. (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI K.V.K SINGH (DR.) RESPONDENT BY: SHRI SUBASH DUTT (ADV.) I.T.A. NO.237(ASR)/2015 ASSESSMENT YEAR:2008-09 THE DCIT CENTRAL CIRCLE JAMMU VS. M/S KASHMIR STEEL ROLLING MILLS, BARI BRAHMANA, JAMMU. PAN:AABFK4948A (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI K.V.K SINGH (DR.) RESPONDENT BY: SHRI SUBASH DUTT (ADV.) CROSS OBJECTION NO. 17(ASR)/2015 (ARISING OUT OF ITA NO. 237(ASR)/2015) ASSESSMENT YEAR: 2008-09 2 M/S KASHMIR STEEL ROLLING MILLS, BARI BRAHMANA, JAMMU. PAN:AABFK4948A VS THE DCIT CENTRAL CIRCLE JAMMU (CROSS OBJECTOR) (RESPONDENT) APPELLANT BY: SHRI K.V.K SINGH (DR.) RESPONDENT BY: SHRI SUBASH DUTT (ADV.) I.T.A. NOS. 319 & 395(ASR)/2015 ASSESSMENT YEAR:2012-13 & 2011-12 THE DCIT CIRCLE-1, JAMMU VS. M/S KASHMIR UDYOG, PHASE-I, INDUSTRIAL AREA, GANGYAL, JAMMU. PAN:AADFK 9880 H (APPELLANT) (RESPONDENT) CROSS OBJECTION NOS. 20 & 21 (ASR)/2015 (ARISING OUT OF ITA NOS.319 & 395(ASR)/2015) ASSESSMENT YEAR: 2012-13 & 2011-12 M/S KASHMIR UDYOG, PHASE-I, INDUSTRIAL AREA, GANGYAL, JAMMU. PAN:AADFK 9880 H VS THE DCIT CENTRAL CIRCLE JAMMU (CROSS OBJECTOR) (RESPONDENT) APPELLANT BY: SHRI K.V.K SINGH (DR.) RESPONDENT BY: SHRI SUBASH DUTT (ADV.) I.T.A .NOS. 472 & 473(ASR)/2015 ASSESSMENT YEARS:2010-11 & 2011-12 THE INCOME TAX OFFICER, WARD-2(4), UDHAMPUR JAMMU & KASHMIR. VS. M/S J.K. PETROCHEMICALS, INDUSTRIAL ESTATE, BATTAL BALLAIAN, UDHAMPUR, THROUGH PARTNER SH. HITESH KOTHARI, R/O E-88, KIRTI NAGAR, NEW DELHI-110015. PAN:AGFJ 0928 G 3 (APPELLANT) (RESPONDENT) APPELLANT BY: SH. K.V.K SINGH (DR.) RESPONDENT BY: NONE. I.T.A. NO 267(ASR)/2015 ASSESSMENT YEAR:2011-12 THE DCIT, CIRCLE-1, JAMMU. VS. M/S MASTER INDIA, LANE NO. 3, PHASE I SIDCO INDUSTRIAL COMPLEX, BARI BRAHMANA PAN: AAMFM 7080 N (APPELLANT) (RESPONDENT) APPELLANT BY: SH. K.V.K.SINGH (DR.) RESPONDENT BY: SH. P.N.ARORA, ADVOCATE I.T.A. NO 396(ASR)/2015 ASSESSMENT YEAR:2012-13 THE DCIT CIRCLE-1 JAMMU. VS. M/S AGGARWAL STEEL ROLLING MILLS, PHASE-II, SIDCO COMPLEX, BARI BRAHMANA, JAMMU. PAN: AAQFA3988H (APPELLANT) (RESPONDENT) APPELLANT BY: SH. K.V.K.SINGH (DR.) RESPONDENT BY: SH. HARDEEP AGGARWAL (C.A) I.T.A. NO 321(ASR)/2015 ASSESSMENT YEAR:2012-13 THE DCIT CIRCLE-1 JAMMU. VS. M/S PEE ELL ALLOYS, UNIT-II SIDCO COMPLEX, BARI BRAHMANA, JAMMU. PAN: AAFFP 4043 H (APPELLANT) (RESPONDENT) APPELLANT BY: SH. K.V.K.SINGH (DR.) RESPONDENT BY: NONE DATE OF HEARING: 30.11.2015 4 DATE OF PRONOUNCEM ENT: 30.11 .2015 I.T.A. NO 296(ASR)/2015 ASSESSMENT YEAR:2010-11 THE DCIT, CIRCLE-1, JAMMU. VS. M/S KASHMIR ISPAT, LANE NO.4, PHASE II SIDCO INDUSTRIAL COMPLEX, BARI BRAHMANA PAN: AAIFK 8142 R (APPELLANT) (RESPONDENT) I.T.A. NO 320(ASR)/2015 ASSESSMENT YEAR:2012-13 THE DCIT, CIRCLE-1, JAMMU. VS. M/S KASHMIR TUBES, LANE NO. 11, 2 ND EXTENSION SIDCO INDUSTRIAL COMPLEX, BARI BRAHMANA PAN: AAAFK 9392 D (APPELLANT) (RESPONDENT) I.T.A. NO 397(ASR)/2015 ASSESSMENT YEAR:2011-12 THE DCIT, CIRCLE-1, JAMMU. VS. M/S NARBADA STEELS LTD, SIDCO INDUSTRIAL COMPLEX, BARI BRAHMANA PAN: AAACH 5769 L (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI K.V.K. SINGH (DR.) RESPONDENT BY: SHRI P.N. ARORA, ADVOCAT E DATE OF HEARING: 0 1/12/2015 DATE OF PRONOUNCEM ENT: 11/12/2015 ORDER PER A.D. JAIN, J.M:- 5 THESE ARE A BUNCH OF APPEALS AND CROSS-OBJECTIONS FILED BY THE DEPARTMENT AND THE ASSESSEES RESPECTIVELY, INVOLVIN G A COMMON ISSUE IN ALL THE CASES PERTAINING TO DIFFERENT ASSESSEES. T HEREFORE, FOR THE SAKE OF CONVENIENCE, CONGRUENCE AND BREVITY, WE ARE DISPOSI NG OF THEM BY THIS COMMON ORDER. FIRST WE SHALL TAKE UP ITA NO. 398/AS R/2015. I.T.A. NO 398(ASR)/2015 [A.Y 2012-13] THE DEPARTMENT HAS FILED THE PRESENT APPEAL AGAINST THE ORDER OF THE CIT(A), JAMMU, DATED 06.05.2015 FOR THE ASSESSMENT YEAR 2012-13 ON THE FOLLOWING GROUNDS: 1. THAT WHETHER THE COMMISSIONER OF INCOME TAX (APPPEALS), JAMMU WAS RIGHT IN LAW TO ALLOW DEDUCTI ON U/S 80IB OF THE INCOME TAX ACT, 1961 ON CENTRAL EXC ISE DUTY REFUND BY RELYING UPON THE JUDGMENT OF THE HONBLE HIGH COURT OF J&K, IN THE CASE OF M/S SHREE BALAJI ALLOYS & OTHERS & IGNORING THE RATIO OF THE LAW ON THE ISSUE AS LAID DOWN IN THE CASE OF PONNI SUGAR & SAWHNEY STEEL AND PRESS WORKS LTD. 2. WHETHER THE COMMISSIONER OF INCOME TAX(APPEALS), JAMMU COMMITTED AN ERROR IN LAW AS LAID DOWN BY THE HONBLE SUPREME COURT IN THE CASE OF PONNI SUGAR & SAWHNEY STEEL AND PRESS WORKS LTD. WHEREIN SIMILAR RECEIPTS WERE HELD TO BE REVENUE IN NATURE AS THE S AME HAD BEEN MADE AFTER THE INDUSTRIES HAD BEEN SET UP AND NOT FOR PURPOSE OF SETTING UP OF THE INDUSTRIES . 3. WHETHER IN LAW, THE COMMISSIONER OF INCOME TAX (APPEALS), JAMMU WAS RIGHT IN NOT APPRECIATING AND APPLYING THE PURPOSE TEST AS LAID DOWN BY THE JUDGMENTS OF THE HONBLE SUPREME COURT, IN THE CASE OF ASSESSEE, AS THE MONEY RECEIVED BY THE ASSESSEE ON ACCOUNT OF CENTRAL EXCISE WAS NOT SUPPOSED TO BE SP ENT IN A PARTICULAR MANNER OR FOR THE PURPOSE OF SUBSTA NTIAL EXPANSION OF THE INDUSTRY. 6 2. AT THE TIME OF HEARING, THE LD. COUNSEL FOR THE ASSESSEE CONTENDED THAT THE ISSUE IN DISPUTE HAS ALREADY BEEN DECIDED BY THE JURISDICTIONAL HIGH COURT OF J & K IN THE CASE OF SHREE BALAJI ALL OYS V. CIT AND ANOTHER (2011) 333 ITR 335 (J&K) IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE, WHERE THE HONBLE HIGH COURT HELD THAT THE EXCISE DUTY REFUND IS TO BE TREATED AS CAPITAL RECEIPT AND NOT LIABL E TO BE TAXED. 3. ON THE OTHER HAND, THE LD. DR HAS STAUNCHLY SUPP ORTED THE ASSESSMENT ORDER, CONTENDING THAT THE LD. CIT(A) HA S ERRED IN PLACING RELIANCE ON THE DECISION IN THE CASE OF SHREE BALA JI ALLOYS V. CIT AND ANOTHER (2011) 333 ITR 335 (J&K), IGNORING THE DECI SION OF THE HONBLE SUPREME COURT IN THE CASE OF PONNI SUGARS AND CHEMI CALS LTD [2008] 306 ITR 392 [SC] AND SAHNEY STEEL & PRESS WORKS LTD [1997] 228 ITR 253 [SC]. 4. AFTER HEARING THE PARTIES AND PERUSING THE RELEV ANT RECORDS AVAILABLE WITH US, WE FIND THAT THE HON'BLE JURISDI CTIONAL HIGH COURT IN THE CASE OF SHREE BALAJI ALLOYS [SUPRA] HAS, WHILE DECIDING THE MATTER IN FAVOUR OF THE ASSESSEE, HOLDING THE EXCISE DUTY REF UND, INTEREST SUBSIDY AND INSURANCE SUBSIDY TO BE CAPITAL RECEIPTS, DULY TAKEN INTO CONSIDERATION NOT ONLY THE HON'BLE SUPREME COURT DE CISIONS IN THE CASE OF PONNI SUGARS AND CHEMICALS LTD [SUPRA] AND SAHNE Y STEEL AND PRESS WORKS LTD [SUPRA], BUT ALSO THAT IN MEPCO INDUSTRIE S LTD VS. CIT, REPORTED IN 319 ITR 208 [SC], WHEREIN, CONSIDERING BOTH THE CASES OF 7 SAHNEY STEEL AND PRESS WORKS LTD [SUPRA] AND PONNI SUGARS AND CHEMICALS LTD [SUPRA], IT WAS OBSERVED THAT THE NAT URE OF THE SUBSIDIES IN EACH OF THE THREE CASES IS SEPARATE AND DISTINCT. T HERE IS NO STRAIGHT- JACKET PRINCIPLE OF DISTINGUISHING A CAPITAL RECEIP T FROM A REVENUE RECEIPT. IT DEPENDS UPON THE CIRCUMSTANCES OF EACH CASE. IN SHREE BALAJI ALLOYS [SUPRA], THE HON'BLE JURISDICTIONAL HIGH COURT OBSE RVED THAT THE TRIBUNAL HAD GONE AGAINST THE HONBLE SUPREME COURT DECISION S IN PONNI SUGARS AND CHEMICALS LTD [SUPRA] AND SAHNEY STEEL AND PRES S WORKS LTD. [SUPRA], IN HOLDING THAT EXCISE DUTY REFUND, INTER EST SUBSIDY AND INSURANCE SUBSIDY WERE PRODUCTION INCENTIVES, AND H ENCE, REVENUE RECEIPTS. 5. THE HON'BLE JURISDICTIONAL HIGH COURT HELD THAT WHILE DOING SO, THE TRIBUNAL HAD REMAINED OBLIVIOUS OF THE FACT THAT TH E OBSERVATIONS IN SAHNEY STEEL AND PRESS WORKS LTD [SUPRA] AND PONNI SUGARS AND CHEMICALS LTD [SUPRA] WERE IN THE CONTEXT OF THE SC HEMES PECULIAR TO THOSE CASES AND THOSE OBSERVATIONS OF THE HON'BLE SUPREME COURT IN THOSE TWO CASES WERE OBSERVATIONS MADE AND NOT LAW LAID DOWN AS SUCH. THE HON'BLE JURISDICTIONAL HIGH COURT OBSERVED THAT THE TRIBUNAL HAD NOT DEALT WITH THAT PART OF THE J & K SCHEME, WHERE BY UNEMPLOYMENT IN THE STATE HAD BEEN INTENDED TO BE ERADICATED, CREAT ING AN ATMOSPHERE FOR ACCELERATED INDUSTRIAL DEVELOPMENT, TO CREATE EMPLO YMENT OPPORTUNITIES TO DEAL WITH THE SOCIAL PROBLEM OF UNEMPLOYMENT IN THE STATE. THE HON'BLE JURISDICTIONAL HIGH COURT HELD THAT THIS WA S A LOP-SIDED 8 INTERPRETATION OF THE NEW INDUSTRIAL POLICY AND CON CESSIONS FORMULATED BY THE CENTRAL GOVERNMENT FOR THE STATE OF JAMMU AND K ASHMIR VIDE OFFICE MEMORANDUM OF JUNE 14, 2002. IT WAS OBSERVED THAT THE CLEAR LEGAL POSITION ADUMBERATED BY THE HONBLE SUPREME COURT O F INDIA ON THE ISSUE IN QUESTION IS THAT TO DETERMINE THE NATURE A ND INTENT OF THE INCENTIVES, AS TO WHETHER THOSE WERE REVENUE RECEIP TS OR CAPITAL RECEIPTS AND THE PURPOSE UNDERLYING THE INCENTIVES, WAS THE DETERMINATIVE TEST. IT WAS OBSERVED THAT THE NEW INDUSTRIAL POLICY AND OTH ER CONCESSIONS FOR THE STATE OF JAMMU AND KASHMIR HAD NOT BEEN CORRECT LY APPRECIATED BY THE TRIBUNAL. IT WAS FURTHER OBSERVED THAT A PERU SAL OF THE OFFICE MEMORANDUM DATED 14.06.2002, INDICATING THE NEW IND USTRIAL POLICY AND OTHER CONCESSIONS FOR THE STATE OF JAMMU AND KASHMI R MAKES IT EXPLICIT THAT THE CONCESSIONS WERE TO ACHIEVE TWIN OBJECTS, VIZ., (I) TO ACCELERATE INDUSTRIAL DEVELOPMENT IN THE STATE OF JAMMU AND KA SHMIR, WHICH HAD BEEN LAGGING BEHIND IN SUCH DEVELOPMENT, AND (II) G ENERATION OF EMPLOYMENT IN THE STATE. IT WAS OBSERVED THAT THE NOTIFICATION DATED 28.11.2003, ISSUED BY THE GOVERNMENT OF INDIA, MINI STRY OF COMMERCE AND INDUSTRY (DEPARTMENT OF INDUSTRIAL POLICY AND P ROMOTION), INTRODUCED AN AMENDMENT IN THE SAID OFFICE MEMORAND UM DATED 14.06.2002, AS PER WHICH, THE OBJECT OF THE CENTRAL GOVERNMENT WAS, AS CONVEYED BY THE HONBLE PRIME MINISTER AT SRINAGAR ON 19.4.2003, FOR CREATION OF ONE LAKH EMPLOYMENT AND SELF-EMPLOYMENT OPPORTUNITIES IN THE STATE OF JAMMU AND KASHMIR. IT WAS FURTHER OB SERVED THAT TO 9 ACHIEVE THE SAID PURPOSE AND OBJECTIVE, IT WAS, INT ER ALIA, PROVIDED IN THE CENTRAL EXCISE NOTIFICATIONS, THAT THE EXEMPTIONS C ONTAINED IN THE NOTIFICATIONS WOULD BE AVAILABLE ONLY ON PRODUCTION OF A CERTIFICATE FROM THE GENERAL MANAGER OF THE CONCERNED DISTRICT INDUS TRIES CENTRE TO THE JURISDICTIONAL DEPUTY COMMISSIONER OF CENTRAL EXCIS E, OR THE ASSTT. COMMISSIONER OF CENTRAL EXCISE, AS THE CASE MAY BE, TO THE EFFECT THAT THE UNIT HAD CREATED THE REQUIRED ADDITIONAL REGULA R EMPLOYMENT, WHICH WOULD NOT, HOWEVER, INCLUDE EMPLOYMENT PROVIDED BY THE INDUSTRIAL UNITS TO DAILY WAGERS OR CASUAL EMPLOYERS ENGAGED IN THE UNITS. 6. THE HON'BLE JURISDICTIONAL HIGH COURT FURTHER HE LD THAT THE OFFICE MEMORANDUM AND THE AMENDMENT INTRODUCED THEREIN, W ITH PARA NO. 3, AS APPEARING IN THE CENTRAL EXCISE NOTIFICATION NOS . 56 AND 57 OF NOVEMBER 11, 2002, MAKES IT AMPLY CLEAR THAT ACCELE RATION OF INDUSTRIAL DEVELOPMENT IN THE STATE OF JAMMU AND KASHMIR WAS W ITH THE OBJECT TO GENERATE EMPLOYMENT AND CREATE OPPORTUNITIES FOR EM PLOYMENT, WHICH, SO CONTEMPLATED, WAS NOT ONLY CASUAL OR TEMPORARY, BUT WAS OF A PERMANENT NATURE. IT WAS HELD THAT THUS, THE PARAMOUNT CONSI DERATION OF THE CENTRAL GOVERNMENT IN PROVIDING THE INCENTIVES TO T HE NEW INDUSTRIAL UNITS AND SUBSTANTIAL EXPANSION OF THE EXISTING UNI TS, WAS THE GENERATION OF EMPLOYMENT THROUGH ACCELERATION OF INDUSTRIAL DE VELOPMENT, TO DEAL WITH THE SOCIAL PROBLEM OF UNEMPLOYMENT IN THE STAT E, ADDITIONALLY CREATING OPPORTUNITIES FOR SELF EMPLOYMENT, AND HE NCE, IT WAS A PURPOSE IN THE PUBLIC SECTOR. IT WAS HELD THAT, THEREFORE , THE INCENTIVES PROVIDED 10 TO THE INDUSTRIAL UNITS IN TERMS OF THE NEW INDUSTR IAL POLICY, OF ACCELERATED INDUSTRIAL DEVELOPMENT IN THE STATE FOR CREATION OF SUCH INDUSTRIAL ATMOSPHERE AND ENVIRONMENT, WHICH WOULD PROVIDE ADDITIONAL PERMANENT SOURCE OF EMPLOYMENT TO THE UNEMPLOYED IN THE STATE OF JAMMU AND KASHMIR WERE, IN FACT, IN THE NATURE OF C REATION OF NEW ASSETS OF INDUSTRIAL ATMOSPHERE AND ENVIRONMENT, HA VING THE POTENTIAL OF EMPLOYMENT GENERATION TO ACHIEVE A SOCIAL OBJECT. SUCH INCENTIVES, DESIGNED TO ACHIEVE A PUBLIC PURPOSE, CANNOT, BY AN Y STRETCH OF REASONING, BE CONSTRUED AS PRODUCTION OR OPERATIONA L INCENTIVES FOR THE BENEFIT OF THE ASSESSEE ALONE. 7. IT WAS FURTHER HELD THAT LOOKING TO THE PURPOSE OF ERADICATION OF THE SOCIAL PROBLEM OF UNEMPLOYMENT IN THE STATE, BY ACC ELERATION OF THE INDUSTRIAL DEVELOPMENT AND REMOVING BACKWARDNESS OF THE AREA THAT LAGGED BEHIND IN INDUSTRIAL DEVELOPMENT, WHICH IS C ERTAINLY A PURPOSE IN THE PUBLIC INTEREST, THE INCENTIVES PROVIDED BY THE OFFICE MEMORANDUM AND STATUTORY NOTIFICATIONS ISSUED IN THIS BEHALF T O THE ASSESSEES, CANNOT BE CONSTRUED AS MERE PRODUCTION AND TRADE INCENTIVE S, AS WAS WRONGLY HELD BY THE TRIBUNAL. IT WAS FURTHER OBSERVED THAT MAKING OF ADDITIONAL PROVISION IN THE SCHEME, THAT INCENTIVES WOULD BECO ME AVAILABLE TO THE INDUSTRIAL UNITS ENTITLED THERETO, FROM THE DATE OF COMMENCEMENT OF THE COMMERCIAL PRODUCTION, AND THAT THESE WERE NOT REQU IRED FOR CREATION OF NEW ASSETS, CANNOT BE VIEWED IN ISOLATION, TO TREAT THE INCENTIVES AS PRODUCTION INCENTIVES, AS HELD BY THE TRIBUNAL, FO R THE MEASURE SO TAKEN 11 APPEARS TO HAVE BEEN INTENDED TO ENSURE THAT THE IN CENTIVES WERE MADE AVAILABLE ONLY TO THE BONAFIDE INDUSTRIAL UNITS, SO THAT THE LARGER PUBLIC INTEREST OF DEALING WITH UNEMPLOYMENT IN THE STATE OF JAMMU AND KASHMIR, IN TERMS OF OFFICE MEMORANDUM, WAS ACHIEVE D. 8. THE HON'BLE JURISDICTIONAL HIGH COURT WENT ON TO SAY THAT THE OTHER FACTORS CONSIDERED BY THE TRIBUNAL IN DETERMI NING THE INCENTIVES AS PRODUCTION INCENTIVE SUBSIDIES MAY NOT BE DECISIVE TO DETERMINE THE CHARACTER OF THE INCENTIVE SUBSIDIES WHEN IT WAS FO UND, AS DEMONSTRATED IN THE OFFICE MEMORANDUM, THE AMENDMENT INTRODUCED THERETO AND THE STATUTORY NOTIFICATION TOO, THAT THE INCENTIVES WER E PROVIDED WITH THE OBJECT OF CREATING AVENUES FOR PERPETUAL EMPLOYMENT , TO ERADICATE THE SOCIAL PROBLEM OF UNEMPLOYMENT IN THE STATE BY ACCE LERATED INDUSTRIAL DEVELOPMENT. IT WAS ON THE BASIS OF THE ABOVE DETA ILED IN-DEPTH CONSIDERATION AND DELIBERATION OF THE MATTER, THAT THE HON'BLE JURISDICTIONAL HIGH COURT DECIDED THE MATTER IN FAV OUR OF THE ASSESSEE, HOLDING THE EXCISE DUTY REFUND, INTEREST SUBSIDY A ND INSURANCE SUBSIDY TO BE CAPITAL RECEIPTS. 9. WE ARE INFORMED THAT AN SLP IS HITHERTO PENDING BEFORE THE HONBLE SUPREME COURT AGAINST THE ABOVE DECISION OF THE HON 'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF SHREE BALAJI ALLOYS [SUPR A]. WE FIND, ON CONSIDERING THE RIVAL CONTENTIONS, IN THE LIGHT OF THE MATERIAL PLACED ON RECORD, THE MATTER TO BE STRAIGHT AND SIMPLE. THE DECISION OF THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF SHREE BALA JI ALLOYS [SUPRA] IS 12 DIRECTLY APPLICABLE TO AND BINDING ON US, THE INFER IOR TRIBUNAL. PENDENCY OF THE SAID SLP NOTWITHSTANDING, IT IS THE DECISION OF THE HON'BLE JURISDICTIONAL HIGH COURT, WHICH, AS OF NOW, HOLDS THE FIELD. IT IS, THEREFORE, OPINED THAT TO BE IN LINE WITH THE PRESC RIBED JUDICIAL DISCIPLINE, WE NEED TO AND MUST FOLLOW SHREE BALAJI ALLOYS [SUP RA] AND THIS IS WHAT THE LD. CIT(A) HAS, AND IN OUR CONSIDERED OPINION, CORRECTLY, DONE. MOREOVER NO DECISION CONTRARY TO SHREE BALAJI ALLOY S [SUPRA] HAS BEEN SUCCESSFULLY PLEADED BY THE DEPARTMENT BEFORE US, P ARTICULARLY IN THE FACE OF THE FACT THAT NOT ONLY THE DECISIONS IN THE CASE S OF SAHNEY STEEL AND PRESS WORKS LTD [SUPRA] AND PONNI SUGARS AND CHEMIC ALS LTD [SUPRA], BUT ALSO THAT IN THE CASE OF MEPCO [SUPRA] HAS EXPR ESSLY BEEN TAKEN INTO CONSIDERATION BY THE HON'BLE JURISDICTIONAL HIGH CO URT IN THE CASE OF SHREE BALAJI ALLOYS [SUPRA]. IT DOES NOT LIE IN TH E MOUTH OF THE DEPARTMENT TO RAISE AS A GRIEVANCE, THE GROUND OF A PPEAL TO THE EFFECT THAT THE LD. CIT(A) ERRED IN FOLLOWING THE DECISION IN T HE CASE OF SHREE BALAJI ALLOYS [SUPRA] RENDERED BY THE HON'BLE JURISDICTION AL HIGH COURT. 10. THE ABOVE SAID, IF WE ARE PERMITTED TO SAY SO I N THE HIGHER WISDOM OF THEIR LORDSHIPS OF THE HON'BLE JURISDICTIONAL HI GH COURT, IT MAY ALSO BE REGISTERED THAT IT HAS NOWHERE BEEN THE CASE OF THE DEPARTMENT THAT THE FINDING OF THE HON'BLE JURISDICTIONAL HIGH COUR T IN SHREE BALAJI ALLOYS [SUPRA] TO THE EFFECT THAT THE GENERATION OF EMPLOY MENT THROUGH ACCELERATION OF INDUSTRIAL DEVELOPMENT WAS THE PARA MOUNT CONSIDERATION FOR THE GOVERNMENT IN PROVIDING INCENTIVES TO THE N EW INDUSTRIAL UNITS IN 13 THE STATE OF JAMMU AND KASHMIR, IS IN CONFLICT WITH THE PROVISIONS OF LAW. IT HAS ALSO NOT BEEN DISPUTED, AS OBSERVED BY THEIR LORDSHIPS IN SHREE BALAJI ALLOYS [SUPRA], THAT THE INCENTIVES IN QUESTION PROVIDE ADDITIONAL REGULAR SOURCE OF EMPLOYMENT WHICH WOULD NOT, HOWEVER, INCLUDE EMPLOYMENT PROVIDED BY THE INDUSTRIAL UNITS TO DAILY WAGERS OR CASUAL EMPLOYERS ENGAGED IN THE UNITS OF THE STATE OF JAMMU AND KASHMIR AND THAT, THEREFORE, THESE INCENTIVES, IN F ACT, ARE IN THE NATURE OF CREATION OF NEW ASSETS OF INDUSTRIAL ATMOSPHERE AND ENVIRONMENT, HAVING THE POTENTIAL OF EMPLOYMENT GENERATION. THAT SUCH O BJECT IS A SOCIAL OBJECT, CANNOT BE DENIED. IT IS AS A NATURAL CORO LLARY TO THIS PROPOSITION, THAT IT HAS BEEN HELD THAT IT CANNOT BE SAID THAT T HE INCENTIVES IN QUESTION ARE INCENTIVES, PRODUCTIONAL OR OPERATIONA L IN NATURE, DESIGNED FOR THE BENEFIT OF THE ASSESSEE ALONE. 11. THE RETROGRADE POSITION TO WHICH THE STATE OF J AMMU AND KASHMIR HAS BEEN PUSHED, IS A WELL KNOWN FACT. IT IS FOR T HE PURPOSE OF ALLEVIATING THE STATE OF ITS THIS BELEAGUERED SITUATION, THAT T HE HON'BLE JURISDICTIONAL HIGH COURT HAS MADE ITS ENUNCIATION IN THE CASE OF SHREE BALAJI ALLOYS [SUPRA]. THE SAME HAS NOWHERE BEEN DISPUTED, AS, I N OUR CONSIDERED OPINION, ALSO CANNOT POSSIBLY BE DONE BY THE DEPART MENT, PARTICULARLY WHEN THE SLP BEFORE THE HONBLE SUPREME COURT REMAI NS ADMITTED AND PENDING.. 12. IN VIEW OF THE ABOVE, SINCE WE ARE OF THE CONSI DERED OPINION THAT THE ISSUE INVOLVED IN THE PRESENT CASE IS SIMILAR T O THE ONE WHICH THE 14 HONBLE HIGH COURT OF JAMMU & KASHMIR HAS DECIDED I N FAVOUR OF THE ASSESSEE, IN THE CASE OF SHREE BALAJI ALLOYS V. CI T AND ANOTHER (2011) 333 ITR 335 (J&K) BY HOLDING THAT THE EXCISE DUTY REFUND, INTEREST SUBSIDY AND INSURANCE SUBSIDY ARE TO BE TREATED AS CAPITAL RECEIPT NOT LIABLE TO BE TAXED, WE, THEREFORE, RESPECTFULLY FOL LOWING THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT OF JAMMU & KASHMI R IN THE CASE OF SHREE BALAJI ALLOYS V. CIT AND ANOTHER (SUPRA), REJ ECT THE GROUNDS RAISED IN THE PRESENT APPEAL OF THE DEPARTMENT, AS THE ISS UE IN DISPUTE IS SQUARELY COVERED BY THE AFORESAID DECISION OF THE H ONBLE JURISDICTIONAL HIGH COURT. ACCORDINGLY, WE DISMISS THE APPEAL FIL ED BY THE DEPARTMENT. 13. IN THE RESULT, THE APPEAL FILED BY THE DEPARTME NT IN ITA NO.398(ASR)/2015 IS DISMISSED. 14. IN ALL THE OTHER APPEALS, I.E., ITA 319 & 395(ASR)/2015, 472 & 473(ASR)/2015, 267(ASR)/2015, 396(ASR)/2015, 321(AS R)/2015, 296(ASR)/2015, 320(ASR)/2015 AND 397(ASR)/2015, TH E FACTS AND CIRCUMSTANCES BEING EXACTLY SIMILAR TO THOSE IN T HE CASE OF M/S SINGLA CABLES, IN ITA NO.398(ASR)/2015 AND, THEREFORE, OU R FINDINGS IN ITA NO.398(ASR)/2015 WILL APPLY, MUTATIS MUTANDIS, TO THESE APPEALS ALSO. ACCORDINGLY, ALL THESE APPEALS FILED BY THE DEPARTM ENT STAND DISMISSED. 15. IN ITA NOS.472 & 473(ASR)/2015, IN THE CASE OF M/S. J.K. PETROCHEMICALS, THOUGH THE NOTICE SENT TO THE ASSE SSEE HAS BEEN RECEIVED BACK UNDELIVERED, FINDING THAT THE MATTER CAN BE DECIDED IN THE ABSENCE OF THE ASSESSEE, WE HAVE DECIDED THE MATTE R ON MERIT, AS ABOVE. THUS, BOTH THE APPEALS OF THE REVENUE ARE DISMISSED . 15 16. IN ITA NO.321(ASR)/2015, IN THE CASE OF M/S. PE E ELL ALLOYS, JAMMU, THE NOTICE HAS BEEN SERVED UPON THE ASSESSEE . DESPITE THIS, NOBODY ATTENDED THE HEARING ON BEHALF OF THE ASSESS EE. HOWEVER, WE HAVE DECIDED THE ISSUE ON MERIT, AS ABOVE. THUS, THE APP EAL OF THE REVENUE IS DISMISSED. 17. AS REGARDS THE APPEAL IN ITA NO.237(ASR)/2015 (KASHMIR STEEL ROLLING MILLS), THE ISSUES RAISED BY THE REVENUE IN GROUND NOS. 1(A) & 1(C) HAVE ALSO BEEN DECIDED BY US HEREINABOVE, IN I TA NO. 398(ASR)/2015 AND THE FINDING GIVEN THEREIN WILL APPLY, MUTATIS M UTANDIS, TO THESE ISSUES ALSO. ACCORDINGLY, GROUND NOS. 1(A) & 1(C) A RE DISMISSED. 18. CONCERNING GROUND NO. 1(B), THE REVENUE HAS CON TENDED THAT THE LD. CIT(A) HAS NOT APPRECIATED THE FACTS REPORTED B Y THE AO IN HIS ORDER U/S 154 DATED 17.05.2013, THAT THE RETURN OF INCOME HAS BEEN PROCESSED AT AN INCOME DECLARED BY THE ASSESSEE FIRM ITSELF A ND AN SLP HAS ALSO BEEN FILED BEFORE THE HONBLE SUPREME COURT OF INDI A AGAINST THE ORDER PASSED BY THE HONBLE HIGH COURT OF JAMMU & KASHMIR IN THE CASE OF SHREE BALAJI ALLOYS. 18.1. THIS ISSUE STANDS ALREADY ADJUDICATED IN FAVO UR OF THE ASSESSEE BY THE DECISION OF THIS BENCH OF THE TRIBUNAL, IN ASSE SSEES OWN CASE FOR THE ASSESSMENT YEAR 2007-08 IN ITA NO.130(ASR)/2014, DA TED 16.01.2015. THE RELEVANT FINDINGS GIVEN BY THE TRIBUNAL IN PARA 9 OF THE SAID ORDER ARE EXTRACTED BELOW, FOR THE SAKE OF READY REFERENCE: 9. IN THE FACTS AND CIRCUMSTANCES AND IN VIEW OF T HE DECISION OF THE HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS. SMT. ARUNA LUTHRA (SUPRA), THE DECISION OF THE HO NBLE KERALA HIGH COURT, IN THE CASE OF KIL KOTAGIRI TEA AND COFFEE ESTATES CO. LTD. (SUPRA) AND ALSO IN THE CASE OF SUPREME INDUSTRIES (SUPRA), IN THE PRESENT CASE, WE FIND THAT THERE IS A MISTAKE APPA RENT FROM RECORD U/S 154 OF THE ACT. BY DERIVING THE SUPPORT OF THE DECISIONS OF BOTH 16 THE HONBLE COURTS HEREINABOVE, WE ARE OF THE VIEW THAT SECTION 154 HAS BEEN ENACTED TO ENABLE THE AUTHORITIES TO RECT IFY THE MISTAKE WHETHER THE MISTAKE IS DONE BY ASSESSEE OR BY AO. T HE LEGISLATIVE INTENT IN SECTION 154 IS NOT TO ALLOW A MISTAKE T O CONTINUE. A LIBERAL CONSTRUCTION OF THE STATUTE HAS TO BE MADE ELSE TH E OBJECT OF THE LEGISLATION SHALL BE FORFEITED. ACCORDINGLY, THE AR GUMENTS BY LD. DR CANNOT HELP THE REVENUE. THEREFORE, IN THE CIRCUMST ANCES AND FACTS OF THE PRESENT CASE, HONBLE JURISDICTIONAL COURT O F J & K HAVING HELD THE EXCISE DUTY REFUND AND INTEREST SUBSIDY R ECEIVED BY THE ASSESSEE AS CAPITAL RECEIPTS IS A DECISION SUBSEQUE NT TO THE DECISION OF AO DATED 17.12.2009 WHERE SUCH RECEIPTS HAVE B EEN ACCEPTED AS REVENUE AS RETURNED BY THE ASSESSEE. ACCORDINGLY , IN VIEW OF THE DECISION IN THE CASE OF SMT. ARUN LUTHRA (SUPRA) AN D KIL KOTAGIRI TEA AND COFFEE ESTATES LTD. (SUPRA), WE ARE OF THE VIEW THAT THERE IS A MISTAKE APPARENT FROM RECORD WHICH IS RECTIFIABLE U /S 154 OF THE ACT AND THE LD. CIT(A) HAS RIGHTLY DIRECTED THE AO TO CARRY OUT THE NECESSARY RECTIFICATION AND THE ORDER OF THE LD. CI T(A) IS FOUND TO BE WELL REASONED ONE AND WE FIND NO INFIRMITY IN THE S AME. 18.2. THEREFORE, RESPECTFULLY FOLLOWING THE ORDER O F THE TRIBUNAL DATED 16.01.2015 (SUPRA) IN THE ASSESSEES OWN CASE, THIS GROUND OF THE REVENUE IS DISMISSED. IN THE RESULT, THE APPEAL OF THE REVENUE IN ITA NO.237(ASR)/2015 IS DISMISSED. 19. AS REGARDS THE C.OS RAISED BY DIFFERENT ASSESSE ES, BEARING NOS.23(ASR)/2015, 17(ASR)/2015 AND 20 & 21(ASR)/201 5, THE SAME ARE SUPPORTIVE TO THE ORDERS OF THE LD. CIT(A) AND THE ASSESSEES, IN FACT, DO NOT HAVE ANY GRIEVANCE IN THE SAID C.OS. ACCORDINGL Y, THE SAME ARE DISMISSED. 20. IN THE RESULT, ALL THE APPEALS OF THE DEPARTMEN T IN ITA NOS.398(ASR)/2015, 237(ASR)/2015, 319 & 395(ASR)/20 15, 472 & 473(ASR)/2015, 267(ASR)/2015, 396(ASR)/2015, 321(AS R)/2015, 296(ASR)/2015, 320(ASR)/2015, AND 397(ASR)/2015, AS WELL AS THE CROSS 17 OBJECTION NOS. 23(ASR)/2015, 17(ASR)/2015 AND 20 & 21(ASR)/2015, FILED BY THE ASSESSEES STAND DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 11 TH DECEMBER, 2015. SD/- SD/- (T.S.KAPOOR) (A.D.JA IN) ACCOUNTANT MEMBER JUDICIAL MEMBER /SKR/ DATED: 11TH DECEMBER, 2015 COPY OF THE ORDER FORWARDED TO: 1. ALL THE ASSESSEES: 2. THE DEPARTMENT 3. THE CIT(A), JAMMU. 4. THE CIT, JAMMU 5. THE SR DR, ITAT, AMRITSAR. TRUE COPY BY ORDER (ASSISTANT REGISTRAR) ITAT, AMRITSAR BENCH, AMRITSAR. TRUE COPY BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH: AMRITSAR.