M/s Shyam Steel Industries Ltd., Kolkata V. DCIT, CC-VII, KOLKATA, Kolkata

ITA 556/KOL/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 4136 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 8 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-12-2016
• Appeal Filed By: Assessee
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 28-03-2014
• Court: TRIBUNAL
• Keywords: Capital receipt

Judgement Text

I.T.A. NO. 556/KOL./2014 ASSESSMENT YEAR: 2010-2011 PAGE 1 OF 3 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA B BENCH, KOLKATA BEFORE SHRI P.M. JAGTAP, ACCOUNTANT MEMBER AND SHRI N.V. VASUDEVAN, JUDICIAL MEMBER I.T.A. NO. 556/KOL/ 2014 ASSESSMENT YEAR: 2010-2011 M/S. SHYAM STEEL INDUSTRIES LIMITED,............... .............................APPELLANT SHYAM TOWERS, EN-32, SECTOR-V, SALT LAKE CITY, KOLKATA-700 092 [PAN: AAGCS 3838 R] -VS.- DEPUTY COMMISSIONER OF INCOME TAX,................. ........................RESPONDENT CENTRAL CIRCLE-VII, KOLKATA, AAYAKAR BHAWAN POORVA, 110, SHANTI PALLY, E.M. BYE PASS, KOLKATA-700 107 APPEARANCES BY: SHRI AMIT KUMAR, A.R., FOR THE ASSESSEE SHRI DAVID CHAWANTHU, JCIT, SR. D.R., FOR THE DEPARTMENT DATE OF CONCLUDING THE HEARING : NOVEMBER 30, 2016 DATE OF PRONOUNCING THE ORDER : DECEMBER 02, 2016 O R D E R PER SHRI P.M. JAGTAP, A.M .: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS), CENTRAL-I, KO LKATA DATED 31.01.2014 AND THE SOLITARY ISSUE RAISED THEREIN RE LATES TO THE ADDITION OF RS.1,25,00,000/- MADE BY THE ASSESSING OFFICER AND CONFIRMED BY THE LD. CIT(APPEALS) TO THE TOTAL INCOME OF THE ASSESSEE ON ACCOUNT OF POWER SUBSIDY ISSUED BY THE ASSESSEE TREATING THE SAME AS REVENUE RECEIPT CHARGEABLE TO TAX. 2. THE ASSESSEE IN THE PRESENT CASE IS A COMPANY, W HICH IS ENGAGED IN THE BUSINESS OF MANUFACTURING OF SPONGE IRON BILLET AND ROLLED PRODUCTS. THE RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATI ON WAS FILED BY IT ON 14.10.2010 DECLARING TOTAL INCOME OF RS.8,94,74,560 /-. IN THE SAID RETURN, POWER SUBSIDY OF RS.1,25,00,000/- RECEIVED DURING T HE YEAR UNDER I.T.A. NO. 556/KOL./2014 ASSESSMENT YEAR: 2010-2011 PAGE 2 OF 3 CONSIDERATION WAS CLAIMED TO BE EXEMPT BY THE ASSES SEE BEING A RECEIPT OF CAPITAL NATURE ON THE GROUND THAT THE OBJECT OF THE SAID ASSISTANCE WAS TO ENABLE THE ASSESSEE TO SET UP A NEW UNIT AND NOT FO R RUNNING ITS BUSINESS. THIS CLAIM OF THE ASSESSEE WAS NOT FOUND ACCEPTABLE BY THE ASSESSING OFFICER AND FOLLOWING THE STAND TAKEN IN ASSESSEES OWN CASE FOR EARLIER YEARS, HE ADDED THE AMOUNT OF RS.1,25,00,000/- RECE IVED BY THE ASSESSEE ON ACCOUNT OF POWER SUBSIDY ON TOTAL INCOME BY TREA TING THE SAME AS REVENUE RECEIPT CHARGEABLE TO TAX. ON APPEAL, THE L D. CIT(APPEALS) CONFIRMED THE SAID ADDITION MADE BY THE ASSESSING O FFICER BY FOLLOWING HIS OWN DECISION IN ASSESSEES CASE FOR ASSESSMENT YEARS 2006-07, 2008- 09 AND 2009-10, WHEREIN A SIMILAR ISSUE WAS DECIDED AGAINST THE ASSESSEE. AGGRIEVED BY THE ORDER OF THE LD. CIT(APP EALS), THE ASSESSEE HAS PREFERRED THIS APPEAL BEFORE THE TRIBUNAL. 3. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AN D ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. IT IS OBSERV ED THAT THE SIMILAR ISSUE HAD COME UP FOR CONSIDERATION IN ASSESSEES OWN CAS E FOR A.YS. 2006-07 AND 2007-08 AND WHEN THE TWO MEMBERS CONSTITUTING T HE DIVISION BENCH OF THIS TRIBUNAL TOOK A DIFFERENT VIEW, THE MATTER WAS REFERRED TO A THIRD MEMBER. HONBLE PRESIDENT OF ITAT ACTING AS A THIRD MEMBER HAS RESOLVED THE CONTROVERSY VIDE HIS ORDER DATED 19.05 .2016 PASSED IN ITA NOS. 65/KOL/2010 AND 665/KOL/2011, WHEREBY HE AGREE D WITH THE VIEW TAKEN BY THE ACCOUNTANT MEMBER THAT THE POWER SUBSI DY GRANTED TO THE ASSESSEE WAS A CAPITAL RECEIPT NOT CHARGEABLE TO TA X. TO ARRIVE AT THE SAID CONCLUSION, THE THIRD MEMBER RELIED ON THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF CIT VS.- PONNI SUGARS AND CHEMICALS LIMITED REPORTED IN 306 ITR 392. THE DIVISION BENCH VIDE ITS ORDER DATED 15.07.2016 HAS ALREADY GIVEN EFFECT TO THE ORDER OF THE THIRD MEMBER AND THE ISSUE THUS HAS BEEN DECIDED FINALLY IN FAVOUR O F THE ASSESSEE IN ASESSEES OWN CASE FOR A.YS. 2006-07 AND 2007-08. E VEN IN A.YS. 2008-09 AND 2009-10, A SIMILAR ISSUE HAS BEEN DECIDED BY TH E TRIBUNAL IN FAVOUR OF THE ASSESSEE VIDE ITS ORDER DATED 03.08.2016 PAS SED IN ITA NOS. 1074 & 1075/KOL/2013 BY FOLLOWING THE DECISION OF THE THIR D MEMBER RENDERED I.T.A. NO. 556/KOL./2014 ASSESSMENT YEAR: 2010-2011 PAGE 3 OF 3 IN ASSESSEES OWN CASE FOR A.YS. 2006-07 AND 2007-0 8. THIS ISSUE INVOLVED IN THE APPEAL OF THE ASSESSEE THUS STANDS DECIDED I N FAVOUR OF THE ASESSEE BY THE ORDER OF THIRD MEMBER AND RESPECTFULLY FOLLO WING THE SAID BINDING PRECEDENT, WE DELETE THE ADDITION OF RS.1,25,00,000 /- MADE ON ACCOUNT OF POWER SUBSIDY BY HOLDING THAT THE SAME IS A CAPITAL RECEIPT NOT CHARGEABLE TO TAX. 4. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWE D. ORDER PRONOUNCED IN THE OPEN COURT ON DECEMBER 02, 2016. SD/- SD/- (N.V. VASUDEVAN) (P.M. JAGTAP) JUDICIAL MEMBER ACCOUNTANT ME MBER KOLKATA, THE 2 ND DAY OF DECEMBER, 2016 COPIES TO : (1) M/S. SHYAM STEEL INDUSTRIES LIMITED, SHYAM TOWERS, EN-32, SECTOR-V, SALT LAKE CITY, KOLKATA-700 092 (2) DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-VII, KOLKATA, AAYAKAR BHAWAN POORVA, 110, SHANTI PALLY, E.M. BYE PASS, KOLKATA-700 107 (3) COMMISSIONER OF INCOME TAX(APPEALS), CENTRAL-I , KOLKATA; (4) COMMISSIONER OF INCOME TAX- , KOLKATA, (5) THE DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, KOLKATA BENCHES, KOLKATA LAHA/SR. P.S.