The Dy. Commissioner of Income-tax, Srinagar V. M/s. Chinar Kashmir Textile Pvt. Ltd,s, Srinagar

ITA 44/ASR/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 0612 (ITAT-AMRITSAR)
• Duration Of Justice: 11 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-01-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2003-2004
• Appeal Filed On: 02-02-2012
• 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. H.S. SIDHU, JUDICIAL MEMBER AND SH. B.P.JAIN, ACCOUNTANT MEMBER I.T.A. NOS.42 & 44(ASR)/2012 ) ASSESSMENT YEAR:2003-04 PAN:AABCC8528M DEPUTY COMMR. OF INCOME TAX, VS. M/S. CHINAR KASH MIR TEXTILE PVT. LTD. CIRCLE-3, SRINAGAR. SOURA, SRINAGAR. (APPELLANT) (RESPONDENT) APPELLANT BY:SH.TARSEM LAL, DR RESPONDENT BY:NONE DATE OF HEARING: 04/01/2013 DATE OF PRONOUNCEMENT:04/01/2013 ORDER PER BENCH ; THESE TWO APPEALS FILED BY THE REVENUE ARE DIRECTE D AGAINST THE DIFFERENT IMPUGNED ORDERS OF THE CIT(A), JAMMU, DAT ED 28.11.2011 RELATING TO ASSESSMENT YEAR 2003-04. THE ISSUE INVOLVED IN B OTH THE APPEALS IS COMMON, THEREFORE, WE ARE DISPOSING OF THE SAME BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. THE GROUNDS RAISED IN ITA NO.42(ASR)/2012 ARE REPRODUCED HEREUNDER WHICH ARE COMMON IN ITA NO . 44(ASR)/2012: 1 ON THE FACTS AND CIRCUMSTANCES WHETHER THE LD. C IT(A) WAS RIGHT IN DELETING PENALTY IMPOSED U/S 271(1)(C) ON ACCOUNT 2 OF DISALLOWANCE OF DEDUCTION U/S 80IB ON EXCISE DU TY REFUND BY RELYING UPON ORDERS OF HON'BLE HIGH COURT OF J& K, JAMMU WHICH HAS BEEN DELIVERED NOT ON MERITS OF THE ISSUE BUT HOLDING THE RECEIPT TO BE A CAPITAL RECEIPT ONLY BECAUSE TH E POLICY UNDER WHICH THE SAME WAS PAID ENVISAGED TACKLING THE UNEM PLOYMENT 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 PRES S WORKS LTD, WHEREIN THE HON'BLE SUPREME COURT HAD HELD SUC H RECEIPTS TO BE THE REVENUE RECEIPTS IN AS MUCH AS IN THAT CA SE 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 HARB OUR DOCK COMPANY WHICH LAYS DOWN TWO IMPORTANT TESTS FOR DET ERMINING WHETHER RECEIPTS 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 D OWN BY THE JUDGMENTS OF THE HON'BLE SUPREME COURT. IN THE CAS E OF ASSESSEE, THE MONEY RECEIVED BY THE ASSESSEE ON ACC OUNT OF REFUND OF CENTRAL EXCISE WAS NOT SUPPOSED TO BE SPE NT IN A PARTICULAR MANNER FOR PURPOSE OF SUBSTANTIAL EXPANS ION OF THE INDUSTRY. 5. THE APPELLANT CRAVES TO AMEND OR ADD ANY ONE OR MORE GROUNDS OF APPEAL. 2. AT THE TIME OF HEARING, THE LD. DR, SH.TARSEM LA L, RELIED UPON THE ORDER PASSED BY THE ASSESSING OFFICER. 3 3. AFTER HEARING THE LD. DR AND THOROUGHLY GOING TH ROUGH THE MATERIAL AVAILABLE ON RECORDS INCLUDING THE IMPUGNED ORDERS PASSED BY THE LD. FIRST APPELLATE AUTHORITY, WE ARE OF THE CONSIDERED OPINI ON THAT THE LD. FIRST APPELLATE AUTHORITY HAS RIGHTLY DELETED THE PENALTY IN DISPUTE ON THE BASIS OF ORDER PASSED BY THE JURISDICTIONAL HIGH COURT OF J & K IN THE CASE OF M/S. SHREE BALAJI ALLOYS AND OTHERS VS. CIT (2011) 333 I TR 335 (J&K) WHERE THE HONBLE HIGH COURT HELD THAT THE EXCISE DUTY REFUND IS TO BE TREATED AS CAPITAL RECEIPT AND NOT LIABLE TO BE TAXED. TH E LD. FIRST APPELLATE AUTHORITY HAS RIGHTLY HELD THAT ONCE THE QUANTUM ADDITION ST ANDS DELETED IN ITS ENTIRETY, BY THE JURISDICTIONAL HIGH COURT OF J & K (SUPRA) IN ASSESSEES OWN CASE, NO PENALTY IS LEVIABLE AND HENCE, THE PENALTY LEVIED U /S 271(1)(C) OF THE I.T.ACT, 1961 BY THE A.O. IS DELETED. THE LD. CIT(A) HAS PA SSED A WELL REASONED ORDER, WHICH DOES NOT REQUIRE ANY INTERFERENCE. HEN CE, WE UPHOLD THE IMPUGNED ORDERS OF THE FIRST APPELLATE AUTHORITY BY DISMISSING THE APPEALS FILED BY THE REVENUE. 4. IN THE RESULT, BOTH THE APPEALS FILED BY THE RE VENUE ARE DISMISSED ORDER PRONOUNCED IN THE OPEN COURT ON 4TH JANUARY, 2013. SD/- SD/- (B.P. JAIN) (H.S. SIDHU) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 4 TH JANUARY, 2013 /SKR/ COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE:M/S. CHINAR KASHMIR TEXTILES PVT. LTD. SRINAGAR.