Appeal details
Counselvise Citation
28720914 RSA 2011
Assessee PAN
Bench
Appeal Number
Duration Of Justice
6 month(s) 26 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
13-12-2011
Appeal Filed By
Department
Order Result
Dismissed
Bench Allotted
DB
Next Hearing Date
13-12-2011
Assessment Year
2008-2009
Appeal Filed On
18-05-2011
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. BEFORE SH. H.L. KARWA, HONBLE VICE PRESIDENT AND SH. D.K. SRIVASTAVA, ACCOUNTANT MEMBER I.T.A. NO. 271(ASR)/2011 ASSESSMENT YEAR:2008-09 THE INCOME TAX OFFICER, VS. M/S. SHIV SHAKTI METAL S, WARD 1(3), JAMMU. BARI BRAHMANA, JAMMU. PAN:ABGFS8493Q (APPELLANT) (RESPONDENT) I.T.A. NO. 272(ASR)/2011 ASSESSMENT YEAR:2007-08 THE INCOME TAX OFFICER, VS. M/S. SUN COMPONENTS, WARD 1(3), JAMMU. SAMBA, JAMMU. PAN:ABBFS3692J (APPELLANT) (RESPONDENT) I.T.A. NOS. 273 & 274(ASR)/2011 ASSESSMENT YEAR:2007-08 & 2008-09 THE INCOME TAX OFFICER, VS. M/S. VARDHMAN ALLOYS, WARD 1(3), JAMMU. GANGYAL, JAMMU. PAN:AAFV3699M (APPELLANT) (RESPONDENT) I.T.A. NOS. 275 & 276(ASR)/2011 ASSESSMENT YEAR:2007-08 & 2008-09 THE INCOME TAX OFFICER, VS. M/S. VIJAY STEEL INDUS TRIES, 2 WARD 1(3), JAMMU. JAMMU. PAN:AAFFV2839P (APPELLANT) (RESPONDENT) I.T.A. NO. 277(ASR)/2011 ASSESSMENT YEAR:2008-09 THE INCOME TAX OFFICER, VS. M/S. SHIVA CONTAINERS, , WARD 1(3), JAMMU. GANGYAL, JAMMU. PAN:ABDFS8980K (APPELLANT) (RESPONDENT) I.T.A. NO. 278(ASR)/2011 ASSESSMENT YEAR:2008-09 THE INCOME TAX OFFICER, VS. M/S. VIPUL GULATI, WARD 1(3), JAMMU. JAMMU. PAN:AJKPG5177H (APPELLANT) (RESPONDENT) I.T.A. NO. 279(ASR)/2011 ASSESSMENT YEAR:2008-09 THE INCOME TAX OFFICER, VS. M/S. SHREE VAISHNO DEV I METALS PVT. WARD 1(3), JAMMU. LTD. JAMMU. PAN:AABCV8857A (APPELLANT) (RESPONDENT) I.T.A. NO. 280(ASR)/2011 ASSESSMENT YEAR:2007-08 THE INCOME TAX OFFICER, VS. M/S. SHREE BALAJI UDYO G, WARD 1(3), JAMMU. JAMMU. PAN:AABFU6419N (APPELLANT) (RESPONDENT) 3 I.T.A. NO. 281(ASR)/2011 ASSESSMENT YEAR:2008-09 THE INCOME TAX OFFICER, VS. M/S. SWASTIK INDUSTRIE S, KATHUA KATHUA. PAN:AAZFS7492R (APPELLANT) (RESPONDENT) I.T.A. NO. 282(ASR)/2011 ASSESSMENT YEAR:2008-09 THE INCOME TAX OFFICER, VS. M/S. BHAGWATI METAL WO RKS, KATHUA KATHUA. PAN:AAGFB0925K (APPELLANT) (RESPONDENT) I.T.A. NO. 283(ASR)/2011 ASSESSMENT YEAR:2008-09 THE INCOME TAX OFFICER, VS. M/S. JAIN BRASS INDUST RIES, WARD 1(1), JAMMU. JAMMU. PAN:AAEFJ5468M (APPELLANT) (RESPONDENT) I.T.A. NOS. 284 & 285(ASR)/2011 ASSESSMENT YEAR:2004-05 & 2005-06 THE INCOME TAX OFFICER, VS.SH. ASHOK KUMAR ABROL ( HUF), WARD 1(1), JAMMU. JAMMU. PAN:AACHA8053R (APPELLANT) (RESPONDENT) I.T.A. NO. 286(ASR)/2011 ASSESSMENT YEAR:2008-09 4 THE INCOME TAX OFFICER, VS. M/S AMAR NATH INDUSTRI ES, KATHUA KATHUA. PAN:AALFA2995D (APPELLANT) (RESPONDENT) I.T.A. NO.287(ASR)/2011 ASSESSMENT YEAR : 2008-09 THE INCOME TAX OFFICER, VS. M/S. BALAJI ROSIN IND USTRIES, WARD 1(1), JAMMU. JAMMU. PAN:AAFFB9385C (APPELLANT) (RESPONDENT) I.T.A. NOS.288 & 289 (ASR)/2011 ASSESSMENT YEAR : 2007-08 & 2008-09 THE INCOME TAX OFFICER, VS. M/S. J. K. ORGANICS, WARD 1(1), JAMMU. JAMMU. PAN:AAEFJ3892R (APPELLANT) (RESPONDENT) I.T.A. NO.290(ASR)/2011 ASSESSMENT YEAR : 2008-09 THE INCOME TAX OFFICER, VS. M/S. JHELUM INDUSTRIE S, WARD 1(1), JAMMU. SAMBA, JAMMU. PAN:AAEFJ9788L (APPELLANT) (RESPONDENT) I.T.A. NO.291(ASR)/2011 ASSESSMENT YEAR : 2008-09 THE INCOME TAX OFFICER, VS. M/S. FOIL PACK INDUST RIES, WARD 1(1), JAMMU. JAMMU. PAN:AABFF6782H (APPELLANT) (RESPONDENT) 5 I.T.A. NO.292(ASR)/2011 ASSESSMENT YEAR : 2007-08 THE INCOME TAX OFFICER, VS. M/S. AAR BEE INDUSTRI ES, WARD 1(1), JAMMU. JAMMU. PAN:AAJFA5228P (APPELLANT) (RESPONDENT) I.T.A. NO.293(ASR)/2011 ASSESSMENT YEAR : 2008-09 THE INCOME TAX OFFICER, VS. M/S. J.S.B. ALUMINIUM , WARD 1(1), JAMMU. SAMBA, JAMMU. PAN:AAFFJ4424J (APPELLANT) (RESPONDENT) I.T.A. NO.294(ASR)/2011 ASSESSMENT YEAR : 2007-08 THE INCOME TAX OFFICER, VS. SH. ASHOK KUMAR (HUF) , WARD 1(1), JAMMU. JAMMU. PAN:AACHA8053R (APPELLANT) (RESPONDENT) I.T.A. NO.394(ASR)/2011 ASSESSMENT YEAR : 2008-09 THE INCOME TAX OFFICER, VS. M/S. KESHAV AGRO MILL S, WARD 1(2), JAMMU. JAMMU. PAN:AAGFK3632C (APPELLANT) (RESPONDENT) 6 I.T.A. NO.395(ASR)/2011 ASSESSMENT YEAR : 2007-08 THE INCOME TAX OFFICER, VS. M/S. BHARAT UDYOG, WARD 1, PATHANKOT. KATHUA. PAN:AAHFB2895H (APPELLANT) (RESPONDENT) I.T.A. NO.407(ASR)/2011 ASSESSMENT YEAR : 2007-08 THE INCOME TAX OFFICER, VS. M/S. WULLAR CEMENT PV T. LTD. WARD 1(3), JAMMU. JAMMU. PAN:AAAFW6873D (APPELLANT) (RESPONDENT) I.T.A. NO.408(ASR)/2011 ASSESSMENT YEAR : 2008-09 THE INCOME TAX OFFICER, VS. SH.. VINOD KUMAR JAIN . WARD 1(3), JAMMU. PROP. M/S. V.K. METAL WORK S, JAMMU. PAN:AAAFPJ5872Q (APPELLANT) (RESPONDENT) I.T.A. NO.409(ASR)/2011 ASSESSMENT YEAR : 2007-08 THE INCOME TAX OFFICER, VS. M/S. S.D. WIRES & CAB LES. WARD 1(3), JAMMU. JAMMU. PAN:AAZFS6120N (APPELLANT) (RESPONDENT) I.T.A. NO.410(ASR)/2011 ASSESSMENT YEAR : 2008-09 7 THE INCOME TAX OFFICER, VS. M/S.SHIVA MINT INDUST RIES,. WARD 1(3), JAMMU. JAMMU. PAN:ABBFS4825M (APPELLANT) (RESPONDENT) I.T.A. NO.411(ASR)/2011 ASSESSMENT YEAR : 2007-08 D.C.I.T VS. M/S. JAI DURGA CEMENTS PVT. LTD. CIR.1, JAMMU. JAMMU. PAN:AABCJ6112E (APPELLANT) (RESPONDENT) I.T.A. NO.412(ASR)/2011 ASSESSMENT YEAR : 2006-07 D.C.I.T. VS. M/S. SHIVA STEEL ROLLING MILLS CIR.1 JAMMU. JAMMU. PAN:AAQFS1282C (APPELLANT) (RESPONDENT) I.T.A. NO.413(ASR)/2011 ASSESSMENT YEAR : 2008-09 D.C.I.T. VS. SH. MAHESH CHAND GOYAL PROP. CIR. 1, JAMMU. M/S. VMI INDUSTRIES, JAMMU . PAN:AAEPG4460C (APPELLANT) (RESPONDENT) I.T.A. NO.414(ASR)/2011 ASSESSMENT YEAR : 2007-08 D.C.I.T. VS. M/S. KASHMIR WIRES, CIR. 1, JAMMU. JAMMU. PAN:AAHFK5280F (APPELLANT) (RESPONDENT) 8 I.T.A. NO. 421(ASR)/2011 ASSESSMENT YEAR:2008-09 THE INCOME TAX OFFICER, VS. M/S. SIDHI VINAYAK ALL OYS INDUSTRIES, KATHUA KATHUA. PAN:ABBFS1745A (APPELLANT) (RESPONDENT) ITA NO. 422(ASR)/2011 ASSESSMENT YEAR:2006-07 THE INCOME TAX OFFICER, VS. M/S. GURU KIRPA PLASTI C INDU. KATHUA KATHUA. PAN:AAEFG4737C (APPELLANT) (RESPONDENT) I.T.A. NO. 423(ASR)/2011 ASSESSMENT YEAR:2008-09 THE INCOME TAX OFFICER, VS. M/S G.TECH INDUSTRIES, KATHUA KATHUA. PAN:AAGFG2339E (APPELLANT) (RESPONDENT) APPELLANTS BY: TARSEM LAL, DR RESPONDENT BY: NONE DATE OF HEARING :13.12.2011 DATE OF PRONOUNCEMENT:13.12.2011 ORDER 9 PER BENCH: THESE THIRTY SEVEN APPEALS FILED BY THE REVENUE I NVOLVING COMMON ISSUE WERE HEARD TOGETHER AND ARE BEING DISPOSED OF F BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2. THE COMMON GROUNDS OF APPEALS ARE AS UNDER:- 1 ON THE FACTS AND CIRCUMSTANCES WHETHER THE LD. C IT(A) WAS RIGHT IN ALLOWING RELIEF ON ACCOUNT OF DEDUCTION U/ S 80IB ON CENTRAL EXCISE DUTY REFUND BY RELYING UPON ORDERS OF HON'BL E HIGH COURT IF J&K, JAMMU WHICH HAS BEEN DELIVERED NOT ON MERITS O F THE ISSUE BUT HOLDING THE RECEIPT TO BE A CAPITAL RECEIPT ONLY BE CAUSE THE POLICY UNDER WHICH THE SAME WAS PAID ENVISAGED TACKLING TH E UNEMPLOYMENT IN THE STATE 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 10 BE SPENT IN A PARTICULAR MANNER FOR PURPOSE OF SUBS TANTIAL EXPANSION OF THE INDUSTRY. 5. THE APPELLANT CRAVES TO AMEND OR ADD ANY ONE OR MORE GROUNDS OF APPEAL. 3. BRIEFLY, THE GROUNDS NO. 1 TO 5 REVOLVE AROUND T HE ISSUE OF EXCISE DUTY REFUND WHICH WAS CLAIMED AS EXEMPT IN VIEW OF SECTION 80IB OF THE INCOME-TAX ACT, 1961 (IN SHORT THE ACT) BEING ALL OWABLE TO THE ASSESSEE. THE AO HAS NOT ALLOWED THE CLAIM OF THE ASSESSEE AN D HELD THAT THE RECEIPTS ON ACCOUNT OF EXCISE DUTY REFUND GRANTED IN VIEW OF GOVERNMENT NOTIFICATION WAS NOT ELIGIBLE TO BE CONSIDERED FOR THE PURPOSE OF DEDUCTION U/S 80IB OF THE ACT. 4. ON APPEAL, THE LD. CIT(A) FOLLOWING THE DECISION OF THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF SHREE BALA JI ALLOWS V. CIT AND ANOTHER (2011) 333 ITR 335 (J&K) HELD THAT THE EXCI SE DUTY REFUND IS TO BE TREATED AS CAPITAL RECEIPT AND NOT LIABLE TO BE T AXED. NOW THE REVENUE IS IN APPEAL BEFORE THIS TRIBUNAL AGAINST THE ORDER OF TH E LD. CIT(A). 5. WE HAVE HEARD SH. TARSEM LAL, THE LD. DR, AT LEN GTH. WE FIND THAT THE ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSE SSEE AND AGAINST THE REVENUE BY THE DECISION OF THE HON'BLE JURISDICTION AL HIGH COURT IN THE CASE OF SHREE BALAJI ALLOWS V. CIT AND ANOTHER (2011) 33 3 ITR 335 (J&K). THE ISSUES BEFORE THE HON'BLE JURISDICTIONAL HIGH COURT FOR DETERMINATION WERE AS UNDER:- (1) WHETHER THE AMOUNT OF EXCISE REFUND AND INTERES T SUBSIDY RECEIVED BY THE APPELLANTS-ASSESSEES, IN PURSUANCE OF THE INCENTIVES ANNOUNCED AND SANCTIONED VIDE GOVERNMENT OF INDIA, MINISTRY OF 11 COMMERCE AND INDUSTRY (DEPARTMENT OF INDUSTRIAL POL ICY AND PROMOTION)S OFFICE MEMORANDUM NO. 1(13)2000-NER D ATED JUNE 14,2002 AND CENTRAL EXCISE NOTIFICATION NOS. 56 AND 57, DATED NOVEMBER 14, 2002 AND OTHER NOTIFICATION ISSUED ON THE SUBJECT, PERTAINING TO THE INDUSTRIAL POLICY INTRODUCED IN T HE STATE OF JAMMU AND KASHMIR, IS A CAPITAL RECEIPT AND, THUS, NOT LI ABLE TO TAX UNDER THE PROVISIONS OF THE ACT, OR REVENUE RECEIPT, AS OPINE D BY THE AUTHORITIES UNDER THE ACT? (2) WHETHER THE APPELLANTS-ASSESSEES ARE ENTITLED T O DEDUCTION UNDER SECTION 80IB OF THE ACT ON THE EXCISE DUTY RE FUND AND INTEREST SUBSIDY ETC., BEING THE INCOME DERIVED FROM THE IND USTRIAL UNDERTAKING, IN CASE THE EXCISE REFUND AND INTEREST SUBSIDY WERE FOUND TO BE REVENUE RECEIPT. 6. THE HON'BLE HIGH COURT OF JAMMU AND KASHMIR WHIL E DECIDING THE MATTER HAS DISCUSSED THE SALIENT FEATURES OF THE NE W INDUSTRIAL POLICY, AMENDMENTS INTRODUCED THERETO AND STATUTORY NOTIFIC ATION ETC. THE HON'BLE HIGH COURT FURTHER DISCUSSED THE DECISION OF HON'B LE SUPREME COURT IN THE CASE OF SAHNEY STEEL AND PRESS WORKS LTD (1997) 228 ITR 253 (S.C) AND OBSERVED AS UNDER:- 26 A PERUSAL OF THE OFFICE MEMORANDUM DATED JUNE 1 4, 2002 INDICATING NEW INDUSTRIAL POLICY AND OTHER CONCESSI ONS FOR THE STATE OF JAMMU AND KASHMIR, MAKES IT EXPLICIT THAT THE CONCE SSIONS WERE ISSUED TO ACHIEVE TWIN OBJECTS VIZ. (I) ACCELERATIO N OF INDUSTRIAL DEVELOPMENT IN THE STATE OF JAMMU AND KASHMIR, WHIC H HAD BEEN FOUND LAGGING BEHIND IN SUCH DEVELOPMENT, AND (II) GENERATION OF EMPLOYMENT IN THE STATE OF JAMMU & KASHMIR. 27 AMENDMENT INTRODUCED TO THE OFFICE MEMORANDUM VI DE NOTIFICATION OF NOVEMBER 28, 2003 OF THE GOVERNMENT OF INDIA, MINISTRY OF COMMERCE AND INDUSTRY (DEPARTMENT OF IN DUSTRIAL POLICY 12 AND PROMOTION) ELOQUENTLY DEMONSTRATES THE CENTRAL GOVERENMENTS INTENTION IN EXTENDING THE INCENTIVES. THE GOVERNM ENTS OBJECTIVE, AS CONVEYED BY THE HONBLE PRIME MINISTER A SRINAGAR O N APRIL 19, 2003, WAS, FOR CREATION OF ONE LAKH EMPLOYMENT AND SELF-EMPLOYMENT OPPORTUNITIES IN JAMMU AND KASHMIR STATE. 28 TO ACHIEVE THE PURPOSE AND OBJECTIVE REFERRED TO HEREINABOVE, IT WAS, INTER ALIA, PROVIDED IN THE CENTRAL EXCISE NOT IFICATIONS THAT THE EXEMPTIONS CONTAINED IN THE NOTIFICATIONS WOULD BE AVAILABLE ONLY ON PRODUCTION OF CERTIFICATE FROM GENERAL MANAGER OF T HE CONCERNED DISTRICT INDUSTRIES CENTRE TO THE JURISDICTIONAL DE PUTY COMMISSIONER OF CENTRAL EXCISE OR THE ASSISTANT COMMISSIONER OF CENTRAL EXCISE, AS THE CASE MAY BE, TO THE EFFECT THAT THE UNIT HAD CR EATED REQUIRED ADDITIONAL REGULAR EMPLOYMENT, WHICH WOULD NOT, HOW EVER, INCLUDE EMPLOYMENT PROVIDED BY THE INDUSTRIAL UNITS TO DAIL Y WAGERS OR CASUAL EMPLOYEES ENGAGED IN THE UNITS. 29 A CLOSE READING OF THE OFFICE MEMORANDUM AND THE AMENDMENT INTRODUCED THERETO WITH PARAGRAPH NO. 3 APPEARING I N THE CENTRAL EXCISE NOTIFICATION NOS. 56 AND 57 OF NOVEMBER 11, 2002, THUS, MAKES IT AMPLY CLEAR THAT THE ACCELERATION OF DEVEL OPMENT OF INDUSTRIES IN THE STATE WAS CONTEMPLATED WITH THE OBJECT OF GENERATION OF EMPLOYMENT IN THE STATE OF JAMMU AND KASHMIR AND THE GENERATION OF EMPLOYMENT, SO, CONTEMPLATED, WAS NOT ONLY CASUA L OR TEMPORARY; BUT WAS ON THE OTHER HAND, OF PERMANENT NATURE. 30 CONSIDERED THUS, THE PARAMOUNT CONSIDERATION OF THE CENTRAL GOVERNMENT IN PROVIDING THE INCENTIVES TO THE NEW I NDUSTRIAL UNITS AND SUBSTANTIAL EXPANSION OF THE EXISTING UNITS, WAS TH E GENERATION OF EMPLOYMENT THROUGH ACCELERATION OF INDUSTRIAL DEVEL OPMENT, TO DEAL WITH THE SOCIAL PROBLEM OF UNEMPLOYMENT IN THE STAT E, ADDITIONALLY CREATING OPPORTUNITIES FOR SELF-EMPLOYMENT, HENCE A PURPOSE IN PUBLIC INTEREST. 31 IN THIS VIEW OF THE MATTER, THE INCENTIVES PROVI DED TO THE INDUSTRIAL UNITS, IN TERMS OF THE NEW INDUSTRIAL PO LICY, FOR ACCELERATED INDUSTRIAL DEVELOPMENT IN THE STATE, FOR CREATION O F SUCH INDUSTRIAL ATMOSPHERE AND ENVIRONMENT, WHICH WOULD PROVIDE ADD ITIONAL PERMANENT SOURCE OF EMPLOYMENT TO THE UNEMPLOYED IN HE STATE OF JAMMU AND KASHMIR, WERE IN FACT, IN THE NATURE OF C REATION OF NEW ASSETS OF INDUSTRIAL ATMOSPHERE AND ENVIRONMENT, H AVING THE POTENTIAL 13 OF EMPLOYMENT GENERATION TO ACHIEVE A SOCIAL OBJECT . SUCH INCENTIVES, DESIGNED TO ACHIEVE PUBLIC PURPOSE, CANNOT, BY ANY STRETCH OF REASONING, BE CONSTRUED AS PRODUCTION OR OPERATIONA L INCENTIVES FOR THE BENEFIT OF ASSESSES ALONE. 32 THUS, LOOKING TO THE PURPOSE, OF ERADICATION OF THE SOCIAL PROBLEM OF UNEMPLOYMENT IN THE STATE BY ACCELERATIO N 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 TH IS BEHALF, TO THE APPELLANTS-ASSESSEES, CANNOT BE CONSTRUED AS MERE P RODUCTION AND TRADE INCENTIVES, AS HELD BY THE TRIBUNAL. 33. MAKING OF ADDITIONAL PROVISION IN THE SCHEME TH AT INCENTIVES WOULD BECOME AVAILABLE TO THE INDUSTRIAL UNITS, ENT ITLED THERETO, FROM THE DATE OF COMMENCEMENT OF THE COMMERCIAL PRODUCTI ON, AND THAT THESE WERE NOT REQUIRED FOR CREATION OF NEW ASSETS CANNOT BE VIEWED IN ISOLATION, TO TREAT THE INCENTIVES AS PRODUCTION IN CENTIVES, AS HELD BY THE TRIBUNAL, FOR THE MEASURE SO TAKEN, APPEARS TO HAVE BEEN INTENDED TO ENSURE THAT THE INCENTIVES WERE MADE AVAILABLE O NLY TO THE BONA FIDE INDUSTRIAL UNITS SO THAT LARGER PUBLIC INTEREST OF DEALING WITH UNEMPLOYMENT IN THE STATE, AS INTENDED, IN TERMS OF THE OFFICE MEMORANDUM, WAS ACHIEVED. 34. THE OTHER FACTORS, WHICH HAD WEIGHED WITH THE T RIBUNAL IN DETERMINE THE INCENTIVES AS PRODUCTION INCENTIVES M AY NOT BE DECISIVE TO DETERMINING THE CHARACTER OF THE INCENTIVE SUBSI DIES, WHEN IT IS FOUND, AS DEMONSTRATED IN THE OFFICE MEMORANDUM, AM ENDMENT INTRODUCED THERETO AND THE STATUTORY NOTIFICATION T OO THAT THE INCENTIVES WERE PROVIDED WITH THE OBJECT OF CREATING AVENUES F OR PERPETUAL EMPLOYMENT, TO ERADICATE THE SOCIAL PROBLEM OF UNEM PLOYMENT IN THE STATE BY ACCELERATED INDUSTRIAL DEVELOPMENT. 7. THE HON'BLE JURISDICTIONAL HIGH COURT CONCLUDED AS UNDER:- 35 FOR ALL WHAT HAS BEEN SAID ABOVE, THE FINDING O F THE TRIBUNAL ON THE FIRST ISSUE THAT THE EXCISE DUTY REFUND, INTERE ST SUBSIDY AND INSURANCE SUBSIDY WERE PRODUCTION INCENTIVES, HENCE REVENUE RECEIPT, CANNOT BE SUSTAINED, BEING AGAINST THE LAW LAID DOW N BY THE HON'BLE 14 SUPREME COURT OF INDIA IN SAHNEY STEEL CASE (1997) 228 ITR 253 AND PONNI SUGARS CASE (2008) 306 ITR 392. 36 THE FINDING OF THE TRIBUNAL THAT THE INCENTIVES WERE REVENUE RECEIPT IS, ACCORDINGLY, SET ASIDE HOLDING THE INCE NTIVES TO THE CAPITAL RECEIPT IN THE HANDS OF THE ASSESSES. 37 IN VIEW OF OUR ABOVE FINDING ON THE FIRST ISSUE, THERE IS NO NEED TO OPINE ON THE SECOND ISSUE, WHICH WAS RAISED IN T HE ALTERNATIVE. 8. RESPECTFULLY FOLLOWING THE JUDGMENT OF THE HON'B LE JURISDICTIONAL HIGH COURT, WE CONFIRM THE ORDERS OF THE LD. CIT(A) IN HOLDING THAT THE EXCISE DUTY REFUND IS TO BE TREATED AS CAPITAL REC EIPT IN THE HANDS OF THE ASSESSEE AND NOT LIABLE TO BE TAXED. 9. IN THE RESULT, ALL THE THIRTY SEVEN APPEALS FILE D BY THE REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 13TH DECEMBER, 2011. SD/- SD/- (D.K.SRIVASTAVA) (H.L. KARWA) ACCOUNTANT MEMBER VICE PRESIDENT DATED: 13TH DECEMBER, 2011 /SKR/ COPY OF THE ORDER IS FORWARDED TO : 1. ALL THE ASSESSEES: 2. THE ITO WARD 3. THE CIT(A), 4. THE CIT, 5. THE SR DR TRUE COPY 15 BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH : AMRITSAR.
