Sh. Wazir Chand Gulati, Jammu V. The Income-tax Officer, Jammu

ITA 475/ASR/2013

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 68276 (ITAT-AMRITSAR)
• Duration Of Justice: 5 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-12-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 17-12-2013
• Assessment Year: 2009-2010
• Appeal Filed On: 01-07-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: P N ARORA
• 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. NO. 475 (ASR)/2013 ASSESSMENT YEAR: 2009-10 PAN: ADPPG3529C SH. WAZIR CHAND GULATI, VS. INCOME TAX OFFICER 5/B/B, GANDHI NAGAR, JAMMU WARD -1 (1), JAMMU (APPELLANT) (RESPONDENT) APPELLANT BY: SH. P.N. ARORA, ADVOCATE RESPONDENT BY: SH. TARSEM LAL, DR DATE OF HEARING: 17.12.2013 DATE OF PRONOUNCEMENT: 20.12.2013 ORDER PER BENCH 1. THE ASSESSEE HAS FILED THE PRESENT APPEAL AGAINST THE IMPUGNED ORDER DATED 17.04.2013 PASSED BY LEARNED CIT(A), JA MMU, FOR THE ASSESSMENT YEAR 2009-10 ON THE FOLLOWING GROUNDS: I. THAT THE ORDER OF LEARNED COMMISSIONER OF INCOME TA X IS AGAINST FACTS AND LAW. II. THAT LEARNED COMMISSIONER OF INCOME TAX IS ERRED IN LAW IN NOT TREATING AN AMOUNT OF RS. 818487/- AS CAPITAL RECEI PT OF THE ASSESSEE AS PER DECISION OF J&K HIGH COURT IN THE C ASE OF SHREE BALAJI ALLOYS VS. CIT AND OTHERS DECIDED IN FAVOUR OF THE ASSESSEE. III. THAT LEARNED COMMISSIONER OF INCOME TAX ERRED IN LA W IN CONFIRMING THAT 80IB IS NOT ALLOWABLE ON 256094/- I .E. 197871/- MISC. RECEIPTS, 25900/- INSURANCE CLAIMS 32323/- ON ACCOUNT OF LOADING CHARGE. 2 I.T.A. NO. 475 (ASR)/2013 ASSESSMENT YEAR: 2009-10 IV. THAT LEARNED COMMISSIONER OF INCOME TAX WAS NOT JUS TIFIED IN CONFIRMING ADDITION OF RS. 256094/- ON WHICH THE AS SESSEE HAS CLAIMED 80IB @ 100% AS ALL THESE INCOMES ARE DERIVE D FROM BUSINESS CARRIED ON BY THE ASSESSEE. V. THAT LEARNED COMMISSIONER OF INCOME TAX HAS CONFIRM ED THAT INTEREST SUBSIDY WAS 818487/- AND NOT 197871/- WHIC H WAS TYPOGRAPHIC MISTAKE BY THE LEARNED COUNSEL FOR THE ASSESSEE. VI. ANY OTHER GROUNDS WHICH MAY BE URGED AND ALLOWED AT THE TIME OF ARGUMENTS. 2. THE ASSESSEE FILED HIS RETURN OF INCOME AT RS. 1 1,20,000/- WHICH INCLUDED INTEREST SUBSIDY OF RS.8,18,487/-, AND OTH ER FDR INCOME AT RS. 37,007/-, AND HAD NOT CLAIMED 80IB OF THE INCOME-TA X ACT, 1961 (IN SHORT THE ACT) ON THE AMOUNT OF RS. 8,18,487/- AND CLAI MED DEDUCTION UNDER SECTION 80IB OF THE ACT AT RS. 1,47,16,797/-. THE A SSESSING OFFICER HAS NOT TREATED INTEREST SUBSIDY AS CAPITAL RECEIPT AND ADDED MISC. RECEIPTS OF RS. 1,97,871/-, INSURANCE CLAIM OF RS. 25,900/-, A ND LOADING CHARGES OF RS. 32,323/-, TOTALING RS. 2,56,094/- AND DID NOT A LLOW THE DEDUCTION UNDER SECTION 80IB OF THE ACT ON 2,56,094/- BY PASS ING ASSESSMENT ORDER DATED 28.12.2011. 3. BEING AGGRIEVED WITH THE ASSESSMENT ORDER DATED 28.12.2011, ASSESSEE FILED AN APPEAL BEFORE LEARNED CIT(A), JAM MU, WHO VIDE IMPUGNED ORDER DATED 17.04.2013, DISMISSED THE APP EAL OF THE ASSESSEE AND UPHELD THE ASSESSMENT ORDER DATED 28.12.2011. N OW, BEING AGGRIEVED WITH THE IMPUGNED ORDER, THE ASSESSEE FILED THE PRE SENT APPEAL. 3 I.T.A. NO. 475 (ASR)/2013 ASSESSMENT YEAR: 2009-10 4. AT THE TIME OF HEARING, LEARNED COUNSEL FOR THE ASSESSEE STATED THAT THE ASSESSING OFFICER HAS WRONGLY DISALLOWED A SUM OF RS. 2,56,094/- BY NOT ALLOWING THE DEDUCTION UNDER SECT ION 80IB OF THE ACT ON THE AMOUNT OF RS. 1,97,871/- AS MISC. RECEIPTS, RS. 25,900/- AS INSURANCE CLAIMS AND 32,323/- ON ACCOUNT OF LOADING CHARGES. HE FURTHER STATED THAT THE INTEREST SUBSIDY HAS BEEN HELD TO B E CAPITAL RECEIPT AS PER THE DECISION OF HON'BLE JAMMU AND KASHMIR HIGH COUR T IN THE CASE OF SHREE BALAJI ALLOYS AND ORS. VS. CIT, REPORTED IN ( 2011) 239 CTR 70 (J&K) AND NOT REVENUE RECEIPTS. AT LAST, HE REQUEST ED THAT THE ADDITIONS IN DISPUTE MAY BE DELETED AND THE CLAIM UNDER SECTION 80IB OF THE ACT ON THE ADDITIONS IN DISPUTE MAY BE ALLOWED. 5. ON THE CONTRARY, LEARNED DR RELIED UPON THE ORDE R PASSED BY LEARNED CIT(A), JAMMU. 6. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE R ELEVANT RECORDS AVAILABLE WITH US. AS REGARDS TO THE ISSUE INVOLVED IN GROUND NO. 1 NOT TREATING THE AMOUNT OF RS. 8,18,487/- AS CAPITAL RE CEIPT OF THE ASSESSEE AS PER THE DECISION OF HON'BLE JAMMU AND KASHMIR HIGH COURT IN THE CASE OF SHREE BALAJI ALLOYS AND ORS. VS. CIT (SUPRA), WE ALLOW THE ISSUE INVOLVED IN GROUND NO. 1 IN FAVOUR OF THE ASSESSEE BY RESPECTFULLY FOLLOWING THE ORDER OF HON'BLE JAMMU AND KASHMIR HI GH COURT (SUPRA) 4 I.T.A. NO. 475 (ASR)/2013 ASSESSMENT YEAR: 2009-10 AND ASSESSING OFFICER IS DIRECTED TO TREAT THE AMOU NT OF RS. 8,18,487/- AS CAPITAL RECEIPT. THE CLAIM OF THE ASSESSEE, REGARDI NG THE DEDUCTION UNDER SECTION 80IB OF THE ACT ON ACCOUNT OF MISCELLANEOUS RECEIPTS, INSURANCE CLAIMS AND LOADING CHARGES, ARE CONFIRMED. THE LEAR NED CIT(A), JAMMU, HAS GIVEN HIS FINDING WITH REGARD TO THE DEDUCTION UNDER SECTION 80IB OF THE ACT IN PARA NO. 4.1 AT PAGE NOS. 2 & 3, WHICH I S REPRODUCED AS UNDER: 4.1 I HAVE CONSIDERED THE FINDINGS OF THE A.O. IN THE ASSESSMENT ORDER AND SUBMISSION OF THE APPELLANT. IN THE ASSES SMENT ORDER THE A.O. HAS NOT ALLOWED DEDUCTION U/S 80IB FOR RS. 2,5 6,094/- COMPRISING OF THE FOLLOWING: 1. MISCELLANEOUS RECEIPTS = RS. 1,97,871/- 2. INSURANCE CLAIM = RS. 25,900/- 3. LOADING CHARGES = RS. 32,323/- TOTAL RS. 2,56,094/- THE APPELLANT HAS ARGUED THAT THE INTEREST SUBSIDY FOR RS. 1,97,871/- IS CAPITAL IN NATURE IN VIEW OF JUDGMENT OF HON'BLE HI GH COURT, J&K IN THE CASE OF SHREE BALAJI ALLOYS VS. CIT AND NOT TAX ABLE. FROM THE ASSESSMENT ORDER, IT IS EVIDENT THAT THE INTEREST S UBSIDY AMOUNT HAS NOT BEEN 8,18,487/- AND NOT RS. 1,97,871/- AS CONTENDED BY THE APPELLANT AND THE A.O. HAS NOT MADE ANY ADDITION WITH REGARD TO RS. 8,18,487/-. THE APPELLANT HAS NOT SHOWN BEFORE ME WITH EVIDENCE THAT THE AMOUNT OF RS. 1,97,871/- IS AN INTEREST SUBSIDY AND NOT MI SC. RECEIPTS. IN THE INSTANT CASE THE ABOVE QUOTED CASE LAW BY TH E APPELLANT IS NOT APPLICABLE BECAUSE THE SAID RECEIPT IS NOT IN THE N ATURE OF INTEREST SUBSIDY BUT MISC. RECEIPTS AS PER THE FACTS EMERGIN G FROM THE RECORDS. CONCERNING DISALLOWANCE OF MISCELLANEOUS RECEIPTS F OR RS. 1,97,871/-, INSURANCE CLAIM FOR RS. 25,900/- AND LOADING CHARGI NG FOR RS. 32,323/, THE CLAIM OF THE APPELLANT THAT THEY QUALI FY FOR DEDUCTION U/S 80IB IS NOT ACCEPTABLE. THESE RECEIPTS ARE NOT THE PROFIT AND GAINS 5 I.T.A. NO. 475 (ASR)/2013 ASSESSMENT YEAR: 2009-10 DERIVED FROM INDUSTRIAL UNDERTAKING HAVING FIRST D EGREE SOURCE. THE ADDITIONS MADE ON DISALLOWANCE OF ABOVE AMOUNT ARE THUS CONFIRMED. 7. WITH THE FOREGOING DISCUSSIONS, WE ARE OF THE VI EW THAT THE LEARNED FIRST APPELLATE AUTHORITY HAS RIGHTLY DISAL LOWED THE MISCELLANEOUS RECEIPTS OF RS. 1,97,871/-, INSURANCE CLAIM OF RS. 25,900/- AND LOADING CHARGING OF RS. 32,323/-, BECAUSE THESE RECEIPTS ARE NOT THE PROFITS AND GAINS DERIVED FROM INDUSTRIAL UNDERTAKI NG. 8. KEEPING IN VIEW THE FACTS AND CIRCUMSTANCES EXP LAINED ABOVE, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 20 TH DECEMBER, 2013 SD/./- SD/./- (B.P. JAIN) (H.S. SIDHU) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 20 TH DECEMBER, 2013 /RK/ COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE: SH. WAZIR CHAND GULATI, 5/B/B, GANDHI NAGAR, JAMMU 2. INCOME TAX OFFICER, WARD -1 (1), JAMMU 3. THE CIT(A), 4. THE CIT, 5. THE SR DR, I.T.A.T., TRUE COPY BY ORDER 6 I.T.A. NO. 475 (ASR)/2013 ASSESSMENT YEAR: 2009-10 (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH: AMRITSAR.