The Income tax Officer, Amritsar. V. M/s. Vipul Rawelly, Amritsar.

ITA 486/ASR/2010

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 0584 (ITAT-AMRITSAR)
• Duration Of Justice: 2 year(s) 1 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-01-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2002-2003
• Appeal Filed On: 14-12-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P N ARORA
• Assessee Lawyers: R L CHHANALIA
• Keywords: Additional evidence; 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.486(ASR)/2011 ASSESSMENT YEAR:2005-06 PAN :AAJFA4500E M/S. ASSOCIATED CEMENT ENGINEERS VS. THE INCOME TAX OFFICER, KANJAWANI, JAMMU. WARD 1(1), JAMMU. (APPELLANT) (RESPONDENT) APPELLANT BY:SH.P.N.ARORA, ADV. RESPONDENT BY:SH. R.L. CHHANALIA, DR DATE OF HEARING: 03/01/2013 DATE OF PRONOUNCEMENT:03/01/2013 ORDER PER BENCH ; THE ASSESSEE HAS FILED THE PRESENT APPEAL AGAINST THE ORDER OF THE CIT(A), JAMMU, DATED 28.06.2011 FOR THE ASSESSMENT YEAR 2005-06 ON THE FOLLOWING GROUNDS: 1. THE LD. CIT(A) AND THE AO HAVE ERRED ON FACTS A ND IN LAW IN PASSING THE IMPUGNED ORDER WHICH IS CONTRARY TO LAW , EQUITY AND JUSTICE AND FACTS & MATERIAL ON RECORD, ARBITRARY, BASED ON CONJECTURES AND SURMISES. ITA NO.486(ASR)/2011 2 2. THE APPELLANT DENIES HIS LIABILITY TO TAX AS DET ERMINED AND COMPUTED AND THE MANNER IN WHICH IT HAS BEEN SO DET ERMINED OR COMPUTED. 3. THAT THE LD. CIT(A) AND AO WERE NOT AT ALL JUSTI FIED IN TREATING THE SUM F RS.12,33,312.00 AS REVENUE RECEIPT. THE L D. CIT(A) AND AO DID NOT APPRECIATE THAT THIS AMOUNT RECEIVE D WAS A CAPITAL RECEIPT WHICH WAS NOT SUBJECT TO TAX. 4. THAT THE LD. CIT(A) AND AO HAS GROSSLY ERRED ON FACTS AND IN LAW IN UPHOLDING AND MAKING THE IMPUGNED ADDITION O N ACCOUNT OF TRANSPORT SUBSIDY BY TREATING THE SAME AS REVEN UE RECEIPT. THE LD. CIT(A) AND AO DID NOT APPRECIATE THAT THIS WAS A CAPITAL RECEIPT AND THIS WAS NOT LIABLE TO TAX. AS SUCH THE ADDITION OF RS.3,62,081 MAY BE DELETED. 5. THAT THE LD. CIT(A) HAS GROSSLY ERRED ON FACTS AND IN LAW IN UPHOLDING THAT THE TRANSPORT SUBSIDY OF RS.12,33,31 2/- RECEIVED BY THE ASSESSEE WAS NOT DERIVED FROM THE INDUSTRIAL UNDERTAKING AND THIS WAS NOT LIABLE FOR CLAIM OF DEDUCTION U/S 80IB OF THE ACT. THAT THE DEDUCTION AS CLAIMED MAY BE ALLOWED. 6. THAT THE APPELLANT CRAVES LEAVES TO AND PERMISSI ON TO ADD, TO ALTER OF DELETE ANY OF THE GROUNDS OF APPEAL AT ANY TIME UPTO THE FINAL DECISION OF THE APPEAL. 7. THE APPELLANT CRAVES LEAVE AND SANCTION TO FILE ADDITIONAL EVIDENCE, IF SO REQUIRED FOR PROPER PROSECUTION OF THE CASE, BASED ON FACTS AND CIRCUMSTANCES, WHICH HAS NOT BEE N OR COULD NOT BE DEDUCED OR FILED BEFORE LOWER AUTHORITIES EI THER BECAUSE PROPER AND SUFFICIENT OPPORTUNITY/TIME WAS NOT PROV IDED OR BECAUSE IT WAS NOT SOLICITED OR ITS NEED WAS NOT PR OVIDED OR BECAUSE IT WAS NOT SOLICITED OR ITS NEED WAS APPREC IATED. 2. AT THE TIME OF HEARING BOTH THE PARTIES AGREED T HAT THE ISSUE IN DISPUTE HAS ALREADY BEEN DECIDED BY THIS BENCH AGAINST THE ASSESSEE BY FOLLOWING THE DECISION OF THE HONBLE HIGH COURT OF HIMACHAL PRAD ESH IN THE CASE OF M/S. ITA NO.486(ASR)/2011 3 KIRAN ENTERPRISES 32 DTR 11/228 CTR 101 AND ALSO THE RECENT DECISION OF THE HONBLE HIMACHAL PRADESH HIGH COURT IN THE CAS E OF M/S. MAHARANI PACKAGING PVT. LTD. REPORTED IN 55 DTR 340. 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 TRANSPORT SUBSIDY IS SQUARELY C OVERED BY THE DECISIONS OF THE HONBLE HIGH COURT OF HIMACHAL PRADESH IN THE C ASE OF M/S. KIRAN ENTERPRISES 32 DTR 11/228 CTR 101 AND M/S. MAHARAN I PACKAGING PVT. LTD. REPORTED IN 55 DTR 340 AGAINST THE ASSESSEE AN D IN FAVOUR OF THE REVENUE. WE HAVE ALSO GONE THROUGH THE ORDER OF THE LD. CIT(A) AND FOUND THAT HE HAS ALSO DECIDED THE ISSUE IN DISPUTE BY FO LLOWING THE DECISION OF THE HONBLE HIGH COURT OF HIMACHAL PRADESH IN THE CASE OF M/S. KIRAN ENTERPRISES (SUPRA) AND M/S. MAHARANI PACKAGING PVT . LTD.(SUPRA). THE RELEVANT PART OF THE FINDINGS OF THE ORDER OF THE LD. CIT(A) IS REPRODUCED FOR THE SAKE OF CONVENIENCE, AS UNDER: 4. I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE LD. AR AND HAS GONE THROUGH THE RELEVANT JUDICIAL PRONOUNCEMEN TS AS WELL AS THE MATERIAL ON RECORDS. I HAVE ALSO HAD THE BENEFIT OF HAVING THE JUDICIAL PRONOUNCEMENTS BY THE HONBLE HIGH COURT OF HIMACHA L PRADESH THE HONBLE HIGH COURT OF HIMACHAL PRADESH IN THE CASE OF M/S. KIRAN ENTERPRISES 32 DTR 11/228 CTR 101 ON THE ISSUE OF TREATMENT OF TRANSPORT SUBSIDY FOR THE PURPOSES OF DEDUCTION U/S 80IB OF THE ACT. I ALSO HAVE BEFORE ME ANOTHER RECENT DECISION OF THE HONBLE HIMACHAL PRADESH HIGH COURT IN THE CASE OF M/S. MAHARANI PA CKAGING PVT. LTD. DIRECT ON THE ISSUE OF FREIGHT SUBSIDY. BOTH THE DECISIONS ARE ITA NO.486(ASR)/2011 4 DIRECTLY ON THIS ISSUE AND IN THOSE DECISIONS THE E LABORATE DISCUSSIONS ARE MADE OF THE JUDGMENTS OF HONBLE SUPREME COURT IN M/S. CAMBAY EKECTRIC SUPPLY INDUSTRIAL CO. 113 ITR 84 (SC) AND STERLING FOODS 237 ITR 579 (SC) AND M/S.LIBERTY INDIA WHICH IS IN RESPECT OF DEPB BENEFITS AND DUTY DRAWBACK, REPORTED IN 317 ITR 219 . THE DECISION MADE BY THE HONBLE HIGH COURT AS ABOVE HAVE DISCUS SED AS TO HOW THE TRANSPORT SUBSIDY IS NOT A PROFIT DERIVED FROM THE BUSINESS SINCE IT IS NOT AN OPERATIONAL PROFIT BUT THE SOURCE OF THE SUBSIDY IS THE SCHEME OF THE GOVERNMENT OF INDIA AND NOT THE BUSINESS OF THE ASSESSEE. THE DECISION OF HONBLE HIMACHAL PRADESH IN CASE OF M/S . OF THE HONBLE HIMACHAL PRADESH HIGH COURT IN THE CASE OF M/S. MA HARANI PACKAGING PVT. LTD. HAS ALSO DISCUSSED IN THE CASE OF CIT VS. ANDAMAN TIMBER INDUSTRIES 242 ITR 204 (CAL.) AS UND ER: 12. IN CIT VS. ANDAMAN TIMBER INDUSTRIES LTD. (200 0) 158 CTR (CAL.) 458 (2000) 242 ITR 204) (CAL.), THE ASSE SSEE HAD CLAIMED THE BENEFIT OF S.80HH ON PROFITS AND GAINS DERIVED FROM THE INDUSTRIAL UNDERTAKING AND HAD INCLUDED TH E AMOUNT PAID TO IT UNDER THE TRANSPORT SUBSIDY SCHEME. THE CALCUTTA HIGH COURT REFERRED TO THE JUDGMENT OF THE APEX CO URT CITED HEREINABOVE AND HELD THAT THE TRANSPORT SUBSIDY IS NOT DERIVED FROM THE ACTIVITY OF THE INDUSTRIAL UNDERTAKING THO UGH IT MAY BE ATTRIBUTABLE TO IT AND THEREFORE CANNOT BE SAID TO BE TREATED AS PART OF THE PROFITS AND GAINS DERIVED FROM THE IND USTRIAL UNDERTAKING. 4A. AFTER THE DISCUSSIONS AS ABOVE, THE HONBLE HIG H COURT OF H.P. CONCLUDED THAT NO DEDUCTION IS AVAILABLE U/S 80IB O F THE I.T. ACT ON THE AMOUNT OF FREIGHT SUBSIDY. NO OTHER JUDGMENT I N FAVOUR OF ASSESSEE ON THE ISSUE IS BROUGHT TO MY NOTICE BY TH E A/R NOR I HAVE COME ACROSS ON MY OWN SUCH A JUDGMENT. IT IS ALSO N OT ARGUED AS TO HOW THE JUDGMENT IS NOT TO BE APPLIED TO THE FACTS OF THE CASE. IN VIEW OF THE ABOVE RESPECTFULLY FOLLOWING THE JUDGMENTS O F THE HONBLE HIMACHAL PRADESH AS REFERRED ABOVE IN THE VIEW OF T HE FACT THAT NO CONTRARY JUDGMENT IS AVAILABLE BEFORE ME, I HOLD TH AT NO DEDUCTION U/S 80IB OF THE ACT IS AVAILABLE TO ASSESSEE ON THE AMO UNT OF FREIGHT SUBSIDY RECEIVED. THE ORDER OF THE AO IS AFFIRMED/C ONFIRMED. IN VIEW OF THIS, THE APPEAL IS DISMISSED. ITA NO.486(ASR)/2011 5 5.1. IN VIEW OF THE ABOVE DISCUSSIONS, WE DO NOT FI ND ANY INFIRMITY IN THE ORDER OF THE LD. CIT(A) WHO HAS PASSED THE ORDER B Y FOLLOWING THE DECISIONS OF THE OF THE HONBLE HIGH COURT OF HIMAC HAL PRADESH IN THE CASE OF M/S. KIRAN ENTERPRISES 32 DTR 11/228 CTR 101 AN D IN THE CASE OF M/S. MAHARANI PACKAGING PVT. LTD. REPORTED IN 55 DTR 340 . ACCORDINGLY, WE UPHOLD THE ORDER OF THE LD. CIT(A) BY DISMISSING TH E APPEAL FILED BY THE ASSESSEE. 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSE E IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 3RD JANUARY, 2013. SD/- SD/- (B.P. JAIN) (H.S. SIDHU) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 3RD JANUARY, 2013 /SKR/ COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE:M/S. ASSOCIATED CEMENT ENGINEERS, JAMM U. 2. THE ITO WARD 1(1), JAMMU. 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.