The Dy.Commissioner of Incoem-tax, Jammu V. M/s. J.K.Oil Industries, Jammu

ITA 400/ASR/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 89854 (ITAT-AMRITSAR)
• Duration Of Justice: 11 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-06-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 03-06-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 12-06-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: TARSEM LAL
• Assessee Lawyers: RATAN LAL GUPTA
• Keywords: Capital receipt
• Section: 80IB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. BEFORE SH. PRAMOD KUMAR, ACCOUNTANT MEMBER AND SH. A.D.JAIN, JUDICIAL MEMBER I.T.A. NO. 400(ASR)/2014 ASSESSMENT YEAR: 2008 - 09 PAN:AADFJ1948B THE DEPUTY COMMISSIONER OF INCOME - TAX, CIRCLE - 1 2 ND FLOOR AAYAKAR BHAWAN RAILHEAD COMPLEX, JAMMU VS. M/S. J.K OIL INDUSTRIES, INDUSTRIAL AREA, GANGYAL, JAMMU. (APPELLANT) (RESPONDENT) APPELLANT BY: SH. TARSEM LAL, DR. RESPONDENT BY: SH. RATAN LAL GUPTA, ADV. DATE OF HEARING: 03 .06.2015 DATE OF PRONOUNCEMENT: 04 .06.2015 ORDER PER A.D.JAIN (JM): THE FIRST CHALLANGE IN DEPARTMENTS APP EAL FOR THE ASSESSMENT YEAR 2008 - 09 IS AGAINST THE ORDER OF THE CIT(A), JAMMU, DATED 26.03 .2014, DELETING THE ADDIT ION/DISALLOWANCE OF RS.1,50,113 / - MADE BY THE AO U/S 80IB OF THE INCOME TAX ACT, 1961 (IN SHORT , THE ACT) ON EXCISE DUTY REFUND, TREATING IT TO BE A RE VENUE RECEIPT NOT DIRECTLY ATTRIBUTABLE TO THE INDUSTRIAL ACTIVITIES OF THE ASSESSEE FIRM. 2 . THE ASSESSING OFFICER MADE THE DISALLOWANCE IN ORDER TO FOLLOW THE CONSISTENCY OF THE STAND AS TAKEN BY THE DEPARTMENT IN OTHER CASES. THE 2 . ITA NO. 400 (ASR)/2014 ASST. YEAR 2008 - 09 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 FAVOUR OF THE ASSESSEE, HAD NOT BEEN ACCEPTED BY THE DEPARTMENT AND THE DEPARTMENTS SPECIAL LEAVE PETITION WAS HI THERTO PENDING BEFORE THE HONBLE SUPREME COURT. 3 . THE LEARNED CIT(A) DELETING THE DISALLOWANCE, FOLLOWING THE JUDGMENT OF THE HONBLE J & K HIGH COURT, IN THE CASE OF M/S. BALAJI ALLOYS AND OTHERS VS. CIT (SUPRA), WHERE IT HAS BEEN HELD THAT EXCISE DUTY REFUND IN PURSUANCE TO THE INCENTIVE ALLOWANCE BY THE GOVERNMENT PERTAINING TO INDUSTRIAL POLICY INTRODUCED IN THE STATE OF J&K ARE CAPITAL RECEIPT. 4 . CHALLENGING THE IMPUGNED ORDER, THE LEARNED DR HAS CONTENDED THAT THE LEARNED CIT(A) HAS ERRED IN DELETING THE ADDITION CORRECTLY MADE BY THE ASSESSING OFFICER BY DISALLOWING THE DELETING 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) HAS ERRED IN FOLLOWING THE JUDGMENT OF HONBLE J&K HIGH COURT, IN THE CASE OF M/S. BALAJI ALLOYS AND OTHERS VS. CIT (SUPRA), WHICH DECISION HAS NOT BEEN ACCEPTED BY THE DEPARTMENT AND THE APPEAL FILED AGAINST THIS DECI SION BEFORE THE HONBLE SUPREME COURT, IS STILL 3 . ITA NO. 400 (ASR)/2014 ASST. YEAR 2008 - 09 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 CHEM ICALS LTD. , 306 ITR 392(SC); WHEREIN, THE HONBLE SUPREME COURT HAS HELD SUCH RECEIPTS TO BE REVENUE RECEIPTS. 5 . HAVING HEARD THE LD. DR AND IN THE LIGHT OF THE MATERIAL PLACED ON RECORD, WE ARE OF THE VIEW THAT THE ISSUE AT HAND IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT OF JAMMU AND KASHMIR, IN THE CASE OF SHREE BALAJI ALLOYS (SUPRA). SHREE BALAJI ALLOYS (SUPRA) HOLDS, INTER ALIA, THAT EXCISE DUTY REFUND IS A CAPITAL RECEIPT. THIS JUDGMENT, I T IS SEEN, HAS BEEN PASSED AFTER DULY TAKING INTO CONSIDERATION THE CASE OF SAHNEY STEEL AND PRESS WORKS LTD. (SUPRA) AND PONNY SUGAR AND CHEMICALS LTD. (SUPRA). THE ISSUE HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE FOLLOWING THE CASE OF MEPCO INDUSTRI ES LTD. VS. CIT, 319 ITR 208 (SC), WHEREIN, BOTH SAHNEY STEEL AND PRESS WORKS LTD. (SUPRA) AND PONNY SUGAR AND CHEMICALS LTD. (SUPRA) WERE CONSIDERED. 6 . AS SUCH, THE DEPARTMENT IS WRONG IN CONTENDING THAT 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 HIGH COURT, IN THE CASE OF 4 . ITA NO. 400 (ASR)/2014 ASST. YEAR 2008 - 09 M/S. BALAJI ALLOYS AND OTHERS VS. CIT (SUPRA), AND THAT THE LEARNED CIT(A) HAS ERRED IN NOT APPRECIATING THE CASE OF SAHNEY STEEL AND PRESS WO RKS LTD.,(SUPRA) AND PONNY SUGARS AND CHEMICALS LTD.(SUPRA). 7 . WE HAVE ALSO TAKEN THE ABOVE VIEW, IN SIMILAR FACTS AND CIRCUMSTANCES, IN INCOME TAX OFFICER, WARD - 3, PATHANKOT VS. M/S. T.K. PAPER MILLS, CHACK SAKTA, KATHUA, H.O.: - PATHANKOT, IN ITA N O. 106(ASR)/2014, FOR A.Y. 2010 - 11, VIDE ORDER DATED 05.08.2014. 8 . FOR THE ABOVE DISCUSSION, GROUND NOS. 1TO3 TAKEN BY THE DEPARTMENT ARE FOUND TO BE SHORN OF MERIT, AND ARE, HENCE, REJECTED. 9. THEREFORE, FINDING NO ERROR WHATSOEVER THEREIN, ON THIS I SSUE, THE LEARNED CIT(A)S ORDER UNDER APPEAL IS UPHELD. 10. APROPS GROUND NOS. 4 & 5, THE LEARNED CIT(A) DELETED THE ADDITIONS OF RS.26,51,520/ - AND RS.1,45,494/ - , OBSERVING, INTER ALIA , THAT THESE ADDITIONS WERE MADE ON A PROTECTIVE BASIS, WHEREAS NO SU BSTA NTIVE ADDITION HAD BEEN MADE IN ANY OTHER HAND . BEFORE US, THE DEPARTMENT HAS NOT ABLE TO CONTROVERT THIS POSITION. NOW, WHEN THERE IS NO SUBSTANTIVE ADDITION MADE, THERE IS NO SCOPE FOR MAKING ANY SUCH ADDITION ON A PROTECTIVE BASIS. THEREFORE, ON THIS SCORE ALSO, THERE IS NO ROOM FOR INTERFERENCE IN THE ORDER OF THE LEAREND CIT(A). THE SAME IS HEREBY CONFIRMED AND GROUND NOS. 4 & 5 ARE ALSO REJECTED. 5 . ITA NO. 400 (ASR)/2014 ASST. YEAR 2008 - 09 11 . IN THE R ESULT, THE APPEAL FIELD BY THE DEPARTMENT IS DISMI SSED. ORDER PRONOUNCED IN THE OP EN COURT ON 0 4 . 0 6 . 2015. S D / - S D / - (PRAMOD KUMAR) (A.D. JAIN) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 0 4 .06.2015 /PK/ COPY OF THE ORDER FORWARDED TO: 1 . THE ASSESSEE: M/S. J.K. OIL INDUSTRIES, INDUSRIES ARE, GANGYAL, JAMMU. 2. THE DEPUTY COMMISSIONER OF INCOME - TAX, CIRCLE - 1. 3. THE CIT(A), 4. THE CIT, 5. THE SR DR, I.T.A.T., TRUE COPY BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH: AMRITSA