Andotra Cement Industries, Kathua V. The Income Tax Officer, Kathua

ITA 40/ASR/2011

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 0615 (ITAT-AMRITSAR)
• Duration Of Justice: 1 year(s) 10 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-01-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 02-01-2013
• Assessment Year: 2005-2006
• Appeal Filed On: 04-02-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R L CHHANALIA
• Keywords: Principle of natural justice; Capital receipt
• Section: 234B; 80IB

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.40(ASR)/2011 ASSESSMENT YEAR:2005-06 PAN :AAFFA8524L M/S. ANDOTRA CEMENT INDUSTRIES VS. THE INCOME TAX O FFICER, INDUSTRIAL AREA, KATHUA. KATHUA. (APPELLANT) (RESPONDENT) APPELLANT BY:SH.JOGINDER SINGH CA RESPONDENT BY:SH. R.L.CHHANALIA, DR DATE OF HEARING: 02/01/2013 DATE OF PRONOUNCEMENT:02/01/2013 ORDER PER BENCH ; THE ASSESSEE HAS FILED THE PRESENT APPEAL AGAINST THE ORDER OF THE CIT(A), JAMMU, DATED 18.11.2010 FOR THE ASSESSMENT YEAR 2005-06 ON THE FOLLOWING GROUNDS: 1. THAT HAVING REGARD TO THE FACTS & CIRCUMSTANCES OF THE CASE THE LD. CIT(A), JAMMU HAS ERRED BOTH IN LAW AND ON FACT S IN CONFIRMING THE ACTION OF THE LD. AO BY TREATING TH E EXCISE DUTY REFUND OF RS.8,04,097/- AS INCOME FROM OTHER SOURCE S. THE MONEY CONSTITUTE THE FUNDS OF THE ASSESSEE THAT HAV E BEEN DEPOSITED WITH THE CENTRAL EXCISE DEPTT IN TRUST UN DER ITA NO.40(ASR)/2011 2 NOTIFICATION NO.56/2002 AND SUBSEQUENTLY REFUNDED T O THE ASSESSEE. 2. THAT HAVING REGARD TO THE FACTS & CIRCUMSTANCES OF THE CASE THE LD. CIT(A), JAMMU HAS ERRED BOTH IN LAW AND ON FACT S IN TREATING THE EXCISE REFUND OF RS.8,04,097/- AS INCO ME NOT HAVING DIRECT NEXUS WITH INDUSTRIAL UNDERTAKING AND DENIED THE LEGITIMATE BENEFIT OF SECTION 80IB OF THE I.T.ACT, 1961 FOR WHICH THE ASSESSEE IS RIGHTFULLY ELIGIBLE ON SUCH I NCOME. 3. CENTRAL EXCISE DUTY IS A CAPITAL RECEIPT NOT LIA BLE TO TAX. THIS VIEW HAS BEEN HELD BY THE HONBLE SUPREME COURT OF INDIA IN THE CASE OF CIT VS. PONNI SUGAR LTD. 306 ITR 392 SA WHNEY STEEL & PRESS WORKS 228 ITR 253. 4. THAT HAVING REGARD TO THE FACTS & CIRCUMSTANCES OF THE CASE THE ACTION OF THE LD. CIT(A), JAMMU IN CONFIRMING THE ACTION OF THE AO BY TREATING THE TRANSPORT SUBSIDY OF RS.22,99,61 9/- AS INCOME FROM OTHER SOURCES AND DENIED THE LEGITIMATE DEDUCTION U/S 80IB OF THE ACT. 5. THAT HAVING REGARD TO THE FACTS & CIRCUMSTANCES OF THE CASE THE LD. CIT(A), JAMMU HAS ERRED BOTH IN LAW AND ON FACT S IN AND ON THE FACTS OF THE CASE AND IS CONTRARY TO THE PRINCI PLES OF NATURAL JUSTICE AS THE APPELLANT HAD FURNISHED ALL THE INFO RMATION IN SUPPORT OF HIS CLAIM IN GOOD FAITH. 6. THAT THE IMPOSITION OF INTEREST U/S 234B IS UNJU STIFIED AND ILLEGAL. 2. THE FACTS NARRATED BY THE REVENUE ARE NOT DISPUT ED BY BOTH THE PARTIES. THEREFORE, THERE IS NO NEED TO REPEAT THE SAME FOR THE SAKE OF CONVENIENCE. ITA NO.40(ASR)/2011 3 3. AT THE TIME OF HEARING BOTH THE PARTIES AGREED T HAT THERE ARE TWO ISSUES INVOLVED IN THE PRESENT APPEAL I.E. ONE RELATING TO EXCISE DUTY REFUND AND ANOTHER RELATING TO TRANSPORT SUBSIDY. 4. FIRST OF ALL, WE WILL DEAL WITH THE ISSUE RAISED IN GROUNDS NO. 1 TO 3 WITH REGARD TO EXCISE DUTY REFUND. AT THE TIME OF H EARING, BOTH THE LD. COUNSEL FOR THE ASSESSEE AND THE LD. DR CONCEDED TH AT THE ISSUE IN DISPUTE HAS ALREADY BEEN DECIDED BY THE JURISDICTIONAL HIGH COU RT OF J & K IN THE CASE OF SHREE BALAJI ALLOYS V. CIT AND ANOTHER (2011) 333 I TR 335 (J&K) IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE, W HERE THE HONBLE HIGH COURT, HAS HELD THAT THE EXCISE DUTY REFUND IS TO B E TREATED AS CAPITAL RECEIPT AND NOT LIABLE TO BE TAXED. 3. AFTER HEARING BOTH THE PARTIES AND PERUSING THE RELEVANT RECORDS AVAILABLE WITH US, WE ARE OF THE VIEW THAT THE ISS UE INVOLVED IN THE PRESENT APPEAL RELATING TO EXCISE DUTY REFUND IS SIMILAR, W HICH THE HONBLE HIGH COURT OF JAMMU & KASHMIR HAS DECIDED IN FAVOUR OF THE ASSESSEE, IN THE CASE OF SHREE BALAJI ALLOYS V. CIT AND ANOTHER (201 1) 333 ITR 335 (J&K) BY HOLDING THAT THE EXCISE DUTY REFUND IS TO BE TR EATED AS CAPITAL RECEIPT AND IS NOT LIABLE TO BE TAXED. THEREFORE, RESPECTFU LLY FOLLOWING THE DECISION ITA NO.40(ASR)/2011 4 OF THE HONBLE JURISDICTIONAL HIGH COURT OF JAMMU & KASHMIR IN THE CASE OF SHREE BALAJI ALLOYS V. CIT AND ANOTHER (SUPRA), WE ALLOW GROUND NOS. 1 TO 3 OF THE APPEAL OF THE ASSESSEE, AS THE ISSUE IN DI SPUTE IS SQUARELY COVERED BY THE AFORESAID DECISION OF THE HIGH COURT. ACCORDING LY, GROUND NOS. 1 TO 3 ARE ALLOWED. 4. IN GROUND NOS. 4 & 5, THE ASSESSEE HAS RAISED T HE ISSUE RELATING TO TRANSPORT SUBSIDY AMOUNTING TO RS.22,99,619/- AS IN COME FROM OTHER SOURCES. BOTH THE PARTIES AGREED THAT THE ISSUE IN DISPUTE HAS ALREADY BEEN DECIDED AGAINST THE ASSESSEE BY THE HONBLE HIGH CO URT OF HIMACHAL PRADESH IN THE CASE OF M/S. KIRAN ENTERPRISES 32 D TR 11/ 228 CTR 101 AND THE RECENT DECISIONS OF THE HONBLE HIMACHAL PRADES H HIGH COURT IN THE CASE OF M/S. MAHARANI PACKAGING PVT. LTD. REPORTED IN 55 DTR 340 AND LASTLY BY THE JUDGMENT OF HONBLE SUPREME COURT IN THE CASE OF M/S. CAMBAY ELECTRIC SUPPLY CO. 113 ITR 84 (SC) AND ST ERLING FOODS 273 ITR 579 (SC). HONBLE HIGH COURT OF HIMACHAL PRADESH HA S HELD THAT THE TRANSPORT SUBSIDY IS NOT A PROFIT DERIVED FROM BUSI NESS SINCE IT IS NOT AN OPERATIONAL PROFIT BUT THE SOURCE OF SUBSIDY IS A S CHEME OF GOVT. OF INDIA AND NOT THE BUSINESS OF ASSESSEE. ITA NO.40(ASR)/2011 5 5. RESPECTFULLY FOLLOWING THE AFORESAID DECISIONS, THE ISSUE INVOLVED IN GROUND NOS 4 & 5 RELATING TO TRANSPORT SUBSIDY IS DECIDED AGAINST THE ASSESSEE AND ACCORDINGLY THESE GROUNDS OF APPEAL A RE DISMISSED. 6. GROUND NO.6 RELATES TO CHARGING OF INTEREST U/S 234B. THIS GROUND OF APPEAL IS MANDATORY AND ACADEMIC IN NATURE AND AS S UCH IS DISPOSED OF ACCORDINGLY. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED ORDER PRONOUNCED IN THE OPEN COURT ON 2ND JANUARY, 2013. (B.P. JAIN) (H.S. SIDHU) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 2ND JANUARY, 2013 /SKR/ COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE:M/S. ANDOTRA CEMENT INDUSTRIES, KATHUA , 2. THE ITO KATHUA. 3. THE CIT(A) 4. THE CIT 5. THE SR DR, ITAT, AMRITSAR. TRUE COPY BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH: AMRITSAR.