The Dy.Commissioner of Income-tax, Jammu V. M/s Metal Sapper Industries, Jammu

ITA 260/ASR/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 85923 (ITAT-AMRITSAR)
• Duration Of Justice: 10 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-03-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 03-03-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 28-04-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Capital receipt
• Section: 80IB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR BEFORE SH. A.D. JAIN, JUDICIAL MEMBER AND SH. B.P. JAIN, ACCOUNTANT MEMBER I.T.A. NO. 260(ASR)/2014 ASSESSMENT YEAR: 2008-09 PAN: AADFS4066K THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE, JAMMU. VS. M/S. SHIVAM METAL SHAPER INDUSTRIES, G.T. ROAD, GNAGYAL, JAMMU. (APPELLANT) (RESPONDENT) CROSS OBJECT ION NO.18 (ASR)/2014 ARISING OUT OF I TA NO.260 (ASR)/2014 ASSESSMENT YEAR: 2008-09 M/S. SHIVAM METAL SHAPER INDUSTRIES, G.T. ROAD, GNAGYAL, JAMMU. VS. THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE, JAMMU. (CROSS OBJECTOR) (RESPONDENT) APPELLANT BY: SMT. RATINDER KAUR, DR RESPONDENT BY: SH. TARUN BANSAL DATE OF HEARING: 03.03.2015 DATE OF PRONOUNCEMENT: 03.03.2015 ORDER PER BENCH : ITA NO.260(ASR)/2014 THIS IS DEPARTMENTS APPEAL FOR THE ASSESSMENT YEAR 2008-09 AGAINST THE ORDER OF THE CIT(A), LUDHIANA, DATED 10.02.2014, DELETING THE ADDITION/DISALLOWANCE OF ITA NO. 260 (ASR)/2014 ASSESSMENT YEAR 2008-09 2 RS.25,54,802/- MADE BY THE AO U/S 80IB OF THE INC OME TAX ACT, 1961 (IN SHORT THE ACT), ON CENTRAL EXCISE DUTY REFUND, TREATING IT T O BE A REVENUE RECEIPT NOT DIRECTLY ATTRIBUTABLE TO THE INDUSTRIAL ACTIVITIES OF THE AS SESSEE-FIRM. 2. THE DEPARTMENT HAS FILED AN APPLICATION FOR ADJO URNMENT. HOWEVER, FINDING THAT THE MATTER CAN BE PROCEEDED WITH, WE ARE DOING SO, REJECTING THE APPLICATION. 3. THE ASSESSING OFFICER MADE THE DISALLOWANCE IN O RDER TO FOLLOW THE CONSISTENCY OF THE STAND AS TAKEN BY THE DEPARTMENT IN OTHER CASES. THE ASSESSING OFFICER OBSERVED THAT THE DECISION IN THE CASE OF M/S SHREE BALAJI ALLOYS AND ORS. VS. CIT , 333 ITR 335 (J&K), WHICH HAS GONE IN FAV OUR OF THE ASSESSEE, HAD NOT BEEN ACCEPTED BY THE DEPARTMENT AND THE DEPARTMENT S SPECIAL LEAVE PETITION WAS HITHERTO PENDING BEFORE THE HONBLE SUPREME COURT. 4. THE LEARNED CIT(A) DELETED THE DISALLOWANCE, FOL LOWING THE JUDGMENT OF THE HONBLE J & K HIGH COURT, IN THE CA SE OF M/S. BALAJI ALLOYS AND OTHERS VS. CIT (SUPRA), WHERE IT HAS BE EN HELD THAT EXCISE DUTY REFUND AND OTHER SUBSIDIES IN PURSUANCE TO TH E INCENTIVE ALLOWANCE BY THE GOVERNMENT PERTAINING TO INDUSTRIAL POLICY I NTRODUCED IN THE STATE OF J & K ARE CAPITAL RECEIPT. 5. CHALLENGING THE IMPUGNED ORDER, THE LEARNED DR H AS CONTENDED THAT THE LEARNED CIT(A) HAS ERRED IN DELETING THE A DDITION CORRECTLY MADE ITA NO. 260 (ASR)/2014 ASSESSMENT YEAR 2008-09 3 BY THE ASSESSING OFFICER BY DISALLOWING THE DEDUCTI ON UNDER SECTION 80IB OF THE ACT, ON EXCISE DUTY REFUND, TREATING IT TO BE A REVENUE RECEIPT NOT DIRECTLY ATTRIBUTABLE TO THE INDUSTRIAL ACTIVITIES OF THE ASSESSEE; THAT WHILE DOING SO, THE LEARNED CIT(A) H AS ERRED IN FOLLOWING THE JUDGMENT OF HONBLE J & K HIGH COURT, IN THE CA SE OF M/S. BALAJI ALLOYS AND OTHERS VS. CIT (SUPRA), WHICH DECISION HAS NOT BEEN ACCEPTED BY THE DEPARTMENT AND THE APPEAL FILED AGA INST THIS DECISION BEFORE THE HONBLE SUPREME COURT, IS STILL PENDING; AND THAT THE LEARNED CIT(A) HAS ERRED IN NOT APPRECIATING THE JUDGMENTS OF THE HONBLE SUPREME COURT IN SAHNEY STEEL AND PRESS WORKS LTD. VS. CIT , 228 ITR 253 (SC) AND CIT VS. PONNY SUGARS AND CHEMICAL S LTD. , 306 ITR 392 (SC); WHEREIN, THE HONBLE SUPREME COURT HAS HE LD SUCH RECEIPTS TO BE REVENUE RECEIPTS. 6. THE LD. COUNSEL FOR THE ASSESSEE HAS RELIED ON T HE IMPUGNED ORDER. 7. HAVING HEARD THE RIVAL CONTENTIONS IN THE LIGHT OF THE MATERIAL PLACED ON RECORD, WE ARE OF THE VIEW THAT THE ISSU E AT HAND IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY DECISION OF TH E HONBLE JURISDICTIONAL HIGH COURT OF JAMMU AND KASHMIR, IN THE CASE OF IN THE CASE OF SHREE BALAJI ALLOYS (SUPRA). SHREE BALA JI ALLOYS(SUPRA), ITA NO. 260 (ASR)/2014 ASSESSMENT YEAR 2008-09 4 HOLDS, INTER ALIA, THAT EXCISE DUTY REFUND IS A CAP ITAL RECEIPT. THIS JUDGMENT, IT IS SEEN, HAS BEEN PASSED AFTER DULY TA KING INTO CONSIDERATION THE CASES OF SAHNEY STEEL AND PRESS WORKS LTD.(SU PRA) AND PONNY SUGARS AND CHEMICALS LTD.(SUPRA). THE ISSUE HAS BE EN DECIDED IN FAVOUR OF THE ASSESSEE FOLLOWING THE CASE OF MEPCO INDUST RIES LTD. VS. CIT, 319 ITR 208 (SC), WHEREIN, BOTH SAHNEY STEEL AND P RESS WORKS LTD.(SUPRA) AND PONNY SUGARS AND CHEMICALS LTD. (SUPRA) WERE CONSIDERED. 8. AS SUCH, THE DEPARTMENT IS WRONG IN CONTENDING T HAT THE LEARNED CIT(A) HAS ERRED IN DECIDING THE ISSUE IN FAVOUR OF THE ASSESSEE BY FOLLOWING THE DECISION IN THE CASE HONBLE J & K HI GH COURT, IN THE CASE OF M/S. BALAJI ALLOYS AND OTHERS VS. CIT (SUPRA) , AND THAT THE LEARNED CIT(A) HAS ERRED IN NOT APPRECIATING THE CASES OF SAHNEY STEEL AND PRESS WORKS LTD.(SUPRA) AND PONNY SUGARS AND CHEM ICALS LTD. (SUPRA). 9. WE HAVE ALSO TAKEN THE ABOVE VIEW, IN SIMILAR FA CTS AND CIRCUMSTANCES, IN INCOME TAX OFFICER, WARD-3, PATH ANKOT VS. M/S. T.K. PAPER MILLS, CHACK SAKTA, KATHUA, H.O.- PATHANKOT, IN ITA NO.106(ASR)/2014, FOR A.Y. 2010-11, VIDE ORDER DATE D 05.08.2014. ITA NO. 260 (ASR)/2014 ASSESSMENT YEAR 2008-09 5 10. FOR THE ABOVE DISCUSSION, THE GROUNDS TAKEN BY THE DEPARTMENT ARE FOUND TO BE SHORN OF MERIT, AND ARE, HENCE, REJECTE D. 11. THEREFORE, FINDING NO ERROR, WHATSOEVER THEREIN , THE LEARNED CIT(A)S ORDER UNDER APPEAL IS UPHELD. C.O. NO.18 (ASR)/2014 12. THE C.O. OF THE ASSESSEE IS SUPPORTIVE OF THE IMPUGNED ORDER. IT IS DISMISSED AS INFRUCTUOUS. 13. IN THE RESULT, BOTH THE APPEAL OF THE REVENUE AS WELL AS C.O. OF THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 3 RD MARCH, 2015. SD/- SD/ (B.P. JAIN) (A.D. JAIN) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 03.03.2015 /PK/ COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE: M/S SHIVAM METAL SHAPER INDUSTRIES, G .T. ROAD, GNAGYAL, JAMMU. 2. THE DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE, JAMMU. 3. THE CIT(A) 4. THE CIT 5. THE SR DR, I.T.A.T., ASR TRUE COPY BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH: AMRITSAR.