B R Agrotech Ltd, New Delhi V. ACIT Circle-4(1), New Delhi

ITA 6244/DEL/2019

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 8105 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 1 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-09-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2011-2012
• Appeal Filed On: 23-07-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ALKA GAUTAM
• Assessee Lawyers: S S NAGAR
• Keywords: Capital asset; Opportunity of being heard; Capital receipt; Set aside
• Section: 143(3); 115JB; 254(2); 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH A, NEW DELHI BEFORE SH. AMIT SHUKLA, JUDICIAL MEMBER DR. B. R. R. KUMAR, ACCOUNTANT MEMBER (THROUGH VIDEO CONFERENCING) ITA NO. 6244/DEL/2019 : ASSTT. YEAR : 2011-12 ITA NO. 6245/DEL/2019 : ASSTT. YEAR : 2012-13 ITA NO. 6246/DEL/2019 : ASSTT. YEAR : 2013-14 ITA NO. 6247/DEL/2019 : ASSTT. YEAR : 2014-15 M/S B R AGROTECH LTD., 1505, VIKRAM TOWER, RAJENDRA PLACE, NEW DELHI-110008 VS ACIT, CIRCLE-4(1), NEW DELHI (APPELLANT) (RESPONDENT) PAN NO. AA BCB3432F ASSESSEE BY : SH. S. S. NAGAR, ADV. REVENUE BY : MS. ALKA GAUTAM, SR. DR DATE OF HEAR ING: 28 . 0 6 .20 2 1 DATE OF PRONOUNCEMENT: 02 .0 9 .20 2 1 ORDER PER DR. B. R. R. KUMAR, ACCOUNTANT MEMBER: THE PRESENT APPEALS HAVE BEEN FILED BY THE ASSESSE E AGAINST THE ORDERS OF LD. CIT(A)-2, NEW DELHI DATED 24.04.2019. 2. SINCE, THE ISSUES INVOLVED IN ALL THESE APPEALS ARE IDENTICAL, WHICH WERE HEARD TOGETHER. 3. IN ITA NO. 6244/DEL/2019, FOLLOWING GROUNDS HAVE BEEN RAISED BY THE ASSESSEE: 1.0 THAT ON THE FACTS AND CIRCUMSTANCES OF THE CAS E, LD. CIT(A) ERRED IN PASSING EX-PARTY ORDER WITHOUT PROVIDING AN OPPORTUNITY OF BEING HEARD. ITA NOS. 6244 TO 6247/DEL/2019 B R AGROTECH LTD. 2 1.1 THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE , LD. CIT(A) ERRED IN PASSING THE EX-ORDER WITHOUT APPRECIATING THE FACT THAT NO NOTICE OF HEARING WAS RECEIVED BY THE APPELLANT AND HENCE THE ORDER PASSE D BY LD. CIT(A) IS WITHOUT JURISDICTION AND ILLEGAL A ND NEED TO BE QUASHED. 2.0 WITHOUT PREJUDICE TO THE GROUND NO. 1.0 & 1.1, THE LD. CIT (A) WAS NOT JUSTIFIED AND GROSSLY ERRED IN NON-CONSIDERING THE FACT AND REJECTING THE APPEAL B Y STATING THAT APPELLANT AGITATED A DEBATABLE ISSUE W HICH IS NOT A SUBJECT OF RECTIFICATION U/S 154. 2.1 THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE, THE LD. CIT(A) WAS NOT JUSTIFIED AND GROSSLY ERRED IN NON-CONSIDERING THE CLAIM OF EXCISE DUTY SUBSIDY AS CAPITAL RECEIPT IN COMPUTING THE TOTAL INCOME UNDER THE NORMAL PROVISION OF THE ACT AS WEL L AS IN COMPUTING BOOK PROFIT U/S 115JB. 2.2 THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE, THE LD. CIT(A) WAS NOT JUSTIFIED AND GROSSLY ERRED IN NON-CONSIDERING THE CLAIM OF EXCISE DUTY SUBSIDY AS CAPITAL RECEIPT AS THE ISSUE IS SQUARELY COVERED BY THE DECISION OF HON'BLE APEX COURT WHERE IN ON THE SAME SCHEME AND SAME FACTUAL SCENARIO, IT WA S HELD THAT THE EXCISE DUTY SUBSIDY IS CAPITAL RECEIP T. 2.3 THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE, THE LD. CIT(A) WAS NOT JUSTIFIED AND GROSSLY ERRED IN NON-CONSIDERING THE CIRCULAR NO. 68 DATED 17- 11-1971 WHEREIN THE ISSUE RAISED IN THE APPEAL HAS BEEN SQUARELY COVERED 3.0 THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE, THE LD' CIT(A) WAS NOT JUSTIFIED AND GROSSLY ERRED IN NON-CONSIDERING THE CLAIM OF FOCUS PRODUCT SCHEME/FOCUS MARKET SCHEME AS CAPITAL RECEIPT IN COMPUTING THE TOTAL INCOME UNDER THE NORMAL PROVISI ON OF THE ACT AS WELL AS IN COMPUTING THE BOOK PROFIT U/ SLL5JB. 4.0 THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE , THE LD. CIT(A) WAS NOT JUSTIFIED AND GROSSLY ERRED BY ITA NOS. 6244 TO 6247/DEL/2019 B R AGROTECH LTD. 3 NOT FOLLOWING THE HIGH COURT DECISION FOR ADMISSIBI LITY OF ADDITIONAL GROUNDS OF APPEAL BEFORE LD. CIT(A), SINCE LD. CIT(A) HAS JURISDICTION TO CONSIDER NEW/O R ADDITIONAL CLAIMS/DEDUCTIONS SUBSEQUENTLY WHICH THROUGH INADVERTENCE ERROR NOT CLAIMED IN RETURN OF INCOME OR BEFORE THE AO. 5.0 THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE , THE LD. CIT(A) WAS NOT JUSTIFIED AND GROSSLY ERROR IN NEGLECTING THE FORM 35, IN WHICH DATE OF FILING OF RECTIFICATION APPLICATION BEFORE THE LD. AO WAS PRO PERLY MENTIONED AND THE ORDER OF THE LD. AO WAS PASSED BEYOND THE TIME LIMIT AS PRESCRIBED IN THE INCOME T AX ACT. 4. GROUND NOS. 1 & 3 ARE NOT PRESSED DURING THE ARG UMENTS. 5. THE ASSESSEE FILED THE RETURN OF INCOME DECLARIN G TOTAL INCOME OF RS.8,14,50,536/- UNDER THE NORMAL PROVISI ONS OF THE IT ACT AND BOOK PROFIT OF RS.14,67,75,360/- U/S 115 JB OF THE ACT. 6. BRIEF FACTS OF THE ISSUE BEFORE US ARE THAT THE ASSESSEE FILED A RECTIFICATION APPLICATION U/S 154 BEFORE TH E ASSESSING OFFICER SEEKING TO CONSIDER THE ISSUE OF EXCISE DUT Y SUBSIDY AND FOCUS PRODUCT SCHEME (FTS)/FOCUS MARKET SCHEME (FMS ) AS CAPITAL RECEIPTS. THE ASSESSING OFFICER REJECTED TH E APPLICATION ON THE GROUNDS THAT ALLOWING OF SUCH CLAIM WILL LEA D TO LOWERING OF TOTAL INCOME AND THE CLAIM OF THE ASSESSEE IS NO T MISTAKE APPARENT FROM THE RECORD. THE ASSESSING OFFICER HEL D THAT, AN ERROR OF FACT AN ARITHMETIC MISTAKE A SMALL CLERICAL ERROR AN ERROR DUE TO OVERLOOKING COMPULSORY PROVISIONS O F THE ACT ITA NOS. 6244 TO 6247/DEL/2019 B R AGROTECH LTD. 4 ARE ONLY RECTIFIABLE U/S 154 AND SINCE THE CLAIM OF THE ASSESSEE IS A DEBATABLE ISSUE AND HENCE IT IS NOT A MISTAKE APPARENT FROM RECORD. 7. THE LD. CIT (A) HELD THAT THE EXCISE REFUND IS N OT CLAIMED AS CAPITAL RECEIPT IN THEIR RETURN OF INCOME AND AF TER ACCEPTING THE RETURNED INCOME BY THE AO, THE CLAIM OF THE ASS ESSEE TO EXCLUDE THE EXCISE DUTY REFUND AND TO RE-COMPUTE TH E INCOME CANNOT BE ACCEPTED. 8. HEARD THE ARGUMENTS OF BOTH THE PARTIES AND PERU SED THE MATERIAL AVAILABLE ON RECORD. 9. THE ASSESSEE IS IN THE BUSINESS OF MANUFACTURING OF PESTICIDES AND INSECTICIDES HAVING MANUFACTURING UNITS IN THE STATE OF HIMACHAL PRADESH AND JAMMU AND KASHMIR. TH E SAID UNITS DUE TO THEIR PRESENCE IN THE NOTIFIED AREA HA VE AVAILED THE BENEFIT IN THE FORM OF EXCISE DUTY SUBSIDY. THE OBJ ECTIVE OF THE SCHEME GRANTING THE SAID SUBSIDY IS TO GENERATE EMP LOYMENT AND DEVELOPMENT OF INDUSTRIES IN THE STATE OF HIMAC HAL PRADESH & JAMMU AND KASHMIR. WHETHER ISSUE FALLS U/S 154 OR NOT? 10. THE ASSESSMENT U/S 143(3) WAS COMPLETED ON 29.0 1.2014 WHEREIN THE SAID SUBSIDY WAS CLAIMED AS REVENUE REC EIPT. HOWEVER, LATER ON IN 2016 WHEN THE SC IN IDENTICAL SCHEME HAS ANNOUNCED THE SAID SUBSIDY AS CAPITAL RECEIPT, THE ASSESSEE FILED APPLICATION U/S 154 TO TREAT THE SAID SUBSIDY AS CA PITAL RECEIPT NOT CHARGEABLE TO TAX. ITA NOS. 6244 TO 6247/DEL/2019 B R AGROTECH LTD. 5 11. NOW A QUESTION ARISES AS TO WHAT CONSTITUTE MIS TAKE APPARENT FROM RECORD, WHETHER, A SUPREME COURT JUDG MENT DELIVERED AT LATER POINT OF TIME AFTER PASSING OR O RDER CAN CONSTITUTE MISTAKE APPARENT FROM RECORD OR NOT, WHE THER INCOME TAX AUTHORITY CAN AMEND ANY ORDER, IF THERE IS ANY MISTAKE APPARENT FROM RECORD WITH RELEVANCE TO A LATER JUDG MENT. 12. WE FIND THAT CBDT CIRCULAR NO. 68 DATED 17.11.1 971 WHEREIN THE ISSUE RAISED IN THE APPEAL HAS BEEN COV ENANTED. THE ENTIRE CLARIFICATION OF THE CBDT IS REPRODUCED FOR THE SAKE OF READY REFERENCE: CIRCULAR : NO. 68 [F.NO. 245/17/71-A&PAC], DATED 17 -11-1971. 899. MISTAKES APPARENT FROM RECORDS - WHETHER CAN B E TREATED AS SUCH ON THE BASIS OF SUBSEQUENT DECISION OF SUPREME COURT 1. THE BOARD ADVISED THAT A MISTAKE ARISING AS A RE SULT OF A SUBSEQUENT INTERPRETATION OF LAW BY THE SUPREME COURT WOULD CO NSTITUTE 'A MISTAKE APPARENT FROM THE RECORDS' AND RECTIFICATORY ACTION UNDER SECTION 35/154 OF THE 1922 ACT/THE 1961 ACT WOULD BE IN ORDER. IT HAS, THEREFORE, BEEN DECIDED THAT WHERE AN ASSESSEE MOVES AN APPLICATION UNDER SECTION 154 POINTING OUT THAT IN THE LIGHT OF A LATER DECISION OF THE SUPREME COURT PRONOUNCING THE CORRECT LEGAL POSITION, A MISTAKE H AS OCCURRED IN ANY OF THE COMPLETED ASSESSMENTS IN HIS CASE, THE APPLICAT ION SHALL BE ACTED UPON, PROVIDED THE SAME HAS BEEN FILED WITHIN TIME AND IS OTHER-WISE IN ORDER. WHERE ANY SUCH APPLICATIONS HAVE ALREADY BEE N REJECTED AND THE ASSESSEE FILES FRESH APPLICATIONS WITHIN THE STATUT ORY TIME LIMIT, THE SAME MAY ALSO BE TREATED ON PAR WITH THE APPLICATIONS WH ICH MAY EITHER BE PENDING OR RECEIVED AFTER THE ISSUE OF THIS CIRCULA R. 2. THE BOARD DESIRE THAT ANY APPEALS OR REFERENCES PENDING ON THE POINT AT ISSUE MAY PLEASE BE WITHDRAWN. ITA NOS. 6244 TO 6247/DEL/2019 B R AGROTECH LTD. 6 JUDICIAL ANALYSIS (BY THE CBDT) EXPLAINED IN - IN ITO V. SMT. MANINI NIRANJANBHAI [ 1992] 41 ITD 324 (AHD.-TRIB.) (SMC) IT WAS OBSERVED THAT AS PER CIRC ULAR NO. 68, DATED 17- 11-1971, IT IS NOW A WELL ESTABLISHED POSITION THAT THE SUPREME COURT DOES NOT DECLARE THE LAW WITH EFFECT FROM THE DATE OF IT S ORDER AND THE LAW DECLARED BY THE SUPREME COURT HAS EFFECT NOT ONLY F ROM THE DATE OF THE DECISION BUT FROM THE INCEPTION OF THE STATUTORY PR OVISION. IT HAS BEEN MENTIONED THEREIN THAT THE BOARD HAVE BEEN ADVISED THAT THE MISTAKE ARISING AS A RESULT OF SUBSE-QUENT INTERPRETATION O F LAW BY THE SUPREME COURT WOULD CONSTITUTE A MISTAKE APPARENT FROM RECO RD AND RECTIFICATORY ACTION UNDER SECTION 154 WOULD BE JUSTIFIED. 13. WE FIND THAT THE CO-ORDINATE BENCH OF ITAT AMRI TSAR IN THE CASE OF DCIT VS. M/S KASHMIR STEEL ROLLING MILLS IN ITA NO. 130/(ASR.)/2014 HELD ON IDENTICAL FACTS THAT NON CO NSIDERATION OF ORDER OF JURISDICTIONAL HIGH COURT CONSTITUTE MI STAKE APPARENT FROM RECORD. FURTHER, THE CO-ORDINATE BENCH OF ITAT MUMBAI IN THE CASE OF NULUX ENGINEERS VS. DCIT IN ITA NO. 2073/MUM/2017 HELD THAT NON-CONSIDERATION OF THE DE CISION OF HONBLE SUPREME COURT AS WELL AS SUBSEQUENT INTERPR ETATION OF LAW BY HON'BLE SUPREME COURT AND ITS NON-CONSIDERAT ION BY REVENUE IN ITS ORDER CONSTITUTE MISTAKE APPARENT FR OM RECORD WHICH CAN BE RECTIFIED U/S 154 OF THE ACT. 14. THE HONBLE SUPREME COURT IN THE CASE ACIT VS. SAURASHTRA KUTCH STOCK EXCHANGE LTD. [173 TAXMAN 23 2] HELD THAT NON CONSIDERATION OF A DECISION OF JURISDICTIO NAL HIGH COURT OR SUPREME COURT CAN BE SAID TO BE A 'MISTAKE APPAR ENT FROM RECORD' WHICH CAN BE RECTIFIED UNDER SECTION 254(2) . ITA NOS. 6244 TO 6247/DEL/2019 B R AGROTECH LTD. 7 AFTER CONSIDERING THE ABOVE CIRCULAR AND JUDICIAL PRONOUNCEMENTS, WE HOLD THAT THE PETITION SUBMITTED BY THE ASSESSEE FALLS WITHIN THE SCOPE OF SECTION 154 OF T HE ACT. WHETHER EXCISE DUTY REFUND IS CAPITAL OR REVENUE RE CEIPT ? 15. THE HON'BLE HIGH COURT OF J&K IN THE CASE OF SH REE BALAJI ALLOYS VS. CIT (198 TAXMAN 122) HELD THAT EXCISE DU TY REFUND, INTEREST SUBSIDY AND INSURANCE SUBSIDY RECEIVED WIT H THE OBJECT OF CREATING AVENUES FOR PERPETUAL EMPLOYMENT, TO ER ADICATE THE SOCIAL PROBLEM OF UNEMPLOYMENT IN THE STATE BY ACCE LERATED INDUSTRIAL DEVELOPMENT IS CAPITAL RECEIPT. 16. THE RELEVANT PORTION OF THE ORDER OF THE HONBL E COURT IS AS UNDER: 24. A CLOSE READING THE OFFICE MEMORANDUM AND THE AMENDMENT INTRODUCED THERETO WITH PARA NO. 3 APPEARING IN THE CENTRAL EXCISE NOTIFICATION NOS. 56 AND 57 OF 11-11-2002, THUS, MA KES IT AMPLY CLEAR THAT THE ACCELERATION OF DEVELOPMENT OF INDUS TRIES IN THE STATE WAS CONTEMPLATED WITH THE OBJECT OF GENERATION OF E MPLOYMENT IN THE STATE OF JAMMU AND KASHMIR AND THE GENERATION OF EM PLOYMENT, SO CONTEMPLATED, WAS NOT ONLY CASUAL OR TEMPORARY; BUT WAS ON THE OTHER HAND, OF PERMANENT NATURE. 25. CONSIDERED THUS, THE PARAMOUNT CONSIDERATION OF THE CENTRAL GOVERNMENT IN PROVIDING THE INCENTIVES TO THE NEW I NDUSTRIAL UNITS AND SUBSTANTIAL EXPANSION OF THE EXISTING UNITS, WA S THE GENERATION OF EMPLOYMENT THROUGH ACCELERATION OF INDUSTRIAL DE VELOPMENT, TO DEAL WITH THE SOCIAL PROBLEM OF UNEMPLOYMENT IN THE STATE, ADDITIONALLY CREATING OPPORTUNITIES FOR SELF-EMPLOY MENT, HENCE A PURPOSE IN PUBLIC INTEREST. ITA NOS. 6244 TO 6247/DEL/2019 B R AGROTECH LTD. 8 26. IN THIS VIEW OF THE MATTER, THE INCENTIVES PROV IDED TO THE INDUSTRIAL UNITS, IN TERMS OF THE NEW INDUSTRIAL PO LICY, FOR ACCELERATED INDUSTRIAL DEVELOPMENT IN THE STATE, FO R CREATION OF SUCH INDUSTRIAL ATMOSPHERE AND ENVIRONMENT, WHICH WOULD PROVIDE ADDITIONAL PERMANENT SOURCE OF EMPLOYMENT TO THE UN EMPLOYED IN THE STATE OF JAMMU AND KASHMIR, WERE IN FACT, IN TH E NATURE OF CREATION OF NEW ASSETS OF INDUSTRIAL ATMOSPHERE AND ENVIRONMENT, HAVING THE POTENTIAL OF EMPLOYMENT GENERATION TO AC HIEVE A SOCIAL OBJECT. SUCH INCENTIVES, DESIGNED TO ACHIEVE PUBLIC PURPOSE, CANNOT, BY ANY STRETCH OF REASONING, BE CONSTRUED AS PRODUC TION OR OPERATIONAL INCENTIVES FOR THE BENEFIT OF ASSESSEES ALONE. 27. THUS, LOOKING TO THE PURPOSE OF ERADICATION OF THE SOCIAL PROBLEM OF UNEMPLOYMENT IN THE STATE BY ACCELERATION OF THE INDUSTRIAL DEVELOPMENT AND REMOVING BACKWARDNESS OF THE AREA T HAT LAGGED BEHIND IN INDUSTRIAL DEVELOPMENT, WHICH IS CERTAINL Y A PURPOSE IN THE PUBLIC INTEREST, THE INCENTIVES PROVIDED BY THE OFF ICE MEMORANDUM AND STATUTORY NOTIFICATIONS ISSUED IN THIS BEHALF, TO THE APPELLANTS- ASSESSEES, CANNOT BE CONSTRUED AS MERE PRODUCTION A ND TRADE INCENTIVES, AS HELD BY THE TRIBUNAL. 28. MAKING OF ADDITIONAL PROVISION IN THE SCHEME TH AT INCENTIVES WOULD BECOME AVAILABLE TO THE INDUSTRIAL UNITS, ENT ITLED THERETO, FROM THE DATE OF COMMENCEMENT OF THE COMMERCIAL PRODUCTI ON, AND THAT THESE WERE NOT REQUIRED FOR CREATION OF NEW ASSETS CANNOT BE VIEWED IN ISOLATION, TO TREAT THE INCENTIVES AS PRODUCTION INCENTIVES, AS HELD BY THE TRIBUNAL, FOR THE MEASURE SO TAKEN, APPEARS TO HAVE BEEN INTENDED TO ENSURE THAT THE INCENTIVES WERE MADE AV AILABLE ONLY TO THE BONA FIDE INDUSTRIAL UNITS SO THAT LARGER PUBLI C INTEREST OF DEALING WITH UNEMPLOYMENT IN THE STATE, AS INTENDED, IN TER MS OF THE OFFICE MEMORANDUM, WAS ACHIEVED. 29. THE OTHER FACTORS, WHICH HAD WEIGHED WITH THE T RIBUNAL IN DETERMINING THE INCENTIVES AS PRODUCTION INCENTIVES MAY NOT BE ITA NOS. 6244 TO 6247/DEL/2019 B R AGROTECH LTD. 9 DECISIVE TO DETERMINE THE CHARACTER OF THE INCENTIV E SUBSIDIES, WHEN IT IS FOUND, AS DEMONSTRATED IN THE OFFICE MEMORAND UM, AMENDMENT INTRODUCED THERETO AND THE STATUTORY NOTIFICATION T OO THAT THE INCENTIVES WERE PROVIDED WITH THE OBJECT OF CREATIN G AVENUES FOR PERPETUAL EMPLOYMENT, TO ERADICATE THE SOCIAL PROBL EM OF UNEMPLOYMENT IN THE STATE BY ACCELERATED INDUSTRIAL DEVELOPMENT. 30. FOR ALL WHAT HAS BEEN SAID ABOVE, THE FINDING O F THE TRIBUNAL ON THE FIRST ISSUE THAT THE EXCISE DUTY REFUND, INTERE ST SUBSIDY AND INSURANCE SUBSIDY WERE PRODUCTION INCENTIVES, HENCE REVENUE RECEIPT, CANNOT BE SUSTAINED, BEING AGAINST THE LAW LAID DOWN BY HON'BLE SUPREME COURT OF INDIA IN SAHNEY STEEL & PR ESS WORKS LTD.'S CASE (SUPRA) AND PONNI SUGARS & CHEMICALS LTD.'S CA SE (SUPRA). 31. THE FINDING OF THE TRIBUNAL THAT THE INCENTIVES WERE REVENUE RECEIPT IS, ACCORDINGLY, SET ASIDE HOLDING THE INCE NTIVES TO BE CAPITAL RECEIPT IN THE HANDS OF THE ASSESSEES. 17. IN CIVIL APPEAL NO. 10061 OF 2011 DATED 19.04.2 016 FILED BY DEPARTMENT AGAINST THE ORDER IN THE CASE OF SHRE E BALAJI ALLOYS VS. CIT HAS BEEN DISMISSED BY THE HON'BLE AP EX COURT HOLDING THAT THE ISSUE RAISED IN THE APPEAL IS COVE RED AGAINST THE REVENUE BY THE DECISION OF THE HONBLE SUPREME COURT IN CIT VS. PONNI SUGARS & CHEMICALS LTD. 306 ITR 392 O R IN THE ALTERNATE, IN CIT VS MEGHALAYA STEELS LTD. 3 ITR 21 7. 18. THE POLICY OF SHREE BALAJI ALLOYS AND THE APPEL LANT IS IDENTICAL. 19. THUS, WE FIND NO DISPUTE THAT THE EXCISE DUTY R EFUND RECEIVED BY THE ASSESSEE IS TO BE TREATED AS CAPITA L RECEIPT. ITA NOS. 6244 TO 6247/DEL/2019 B R AGROTECH LTD. 10 EXCLUSION OF CAPITAL RECEIPTS IN COMPUTING BOOK PRO FIT U/S 115JB 20. THE CONCURRENT READING OF SECTION 2(45), SECTIO N 4 AND SECTION 5 REVEALS THAT TAX IS PAYABLE ON THE TOTAL INCOME AS PER SECTION 2(45) WHICH MEANS TOTAL AMOUNT OF INCOME RE FERRED IN SECTION 5 AND COMPUTED IN THE MANNER PRESCRIBED BY THE ACT. IN THE CONTEXT, THE PROVISIONS OF SECTION 115JB ARE EX AMINED. THE HEAD NOTES START WITH SPECIAL PROVISION FOR PAYMEN T OF TAX BY A CERTAIN COMPANIES. IT PROVIDES FOR A SUBSTITUTED M ECHANISM TO COMPUTE TAX WITH THE REGARD TO THE COMPANIES WHICH ARE ACTUALLY HAVING NET PROFITS AS PER THE BOOKS BUT WH OSE TAXABLE INCOME IS LESS OR NIL OWING TO CERTAIN BENEFICIAL P ROVISION. THE PROVISION OF SECTION 5 WHICH KICKS OFF WITH SUBJEC T TO THE PROVISIONS OF THIS ACT, THE TOTAL INCOME OF ...... THUS ENCOMPASSES, THE PROVISIONS OF SECTION 115JB. THE F UNDAMENTAL PRINCIPLES LAID DOWN BY VARIOUS COURTS IS THAT ALL RECEIPTS CANNOT BE TREATED AS INCOME AND HENCE CANNOT BE TAXED UNDE R THE INCOME TAX ACT. ONLY THAT RECEIPT WHICH FORMS PART OF THE INCOME ARE TO BE TAXED. THE CAPITAL RECEIPTS WHIC H ARE OTHERWISE NOT SUBJECT TO TAX UNDER THE NORMAL PROVI SIONS OF THE ACT ARE NOT ENVISAGED TO BE TAXED UNDER THE PROVISI ONS OF MINIMUM ALTERNATE TAX. ONCE A RECEIPT IS NOT CONS IDERED AS INCOME, THE SAME CANNOT BE SUBJECTED TO TAX UNDER T HIS ACT AS SUCH RECEIPT NATURALLY CLASSIFIED UNDER CAPITAL REC EIPT. WHICH WAS NEVER MEANT TO BE TAXED CANNOT BE TAXED EVEN U/ S 115JB. 21. THE HONBLE SUPREME COURT IN THE CASE OF APOLLO TYRES LTD. 255 ITR 273 HELD THAT THE REVENUE CANNOT GO BEYOND THE NET PROFIT SHOWN IN THE P&L ACCOUNT EXCEPT TO THE EXTEN T PROVIDED IN ITA NOS. 6244 TO 6247/DEL/2019 B R AGROTECH LTD. 11 THE EXPLANATION TO SECTION 115J. THE HONBLE HIGH C OURT OF KARNATAKA IN THE CASE OF HARIRAM HOTELS PVT. LTD. I N ITA NO.53/2009 DATED 16.12.2015 HELD THAT THE CAPITAL R ECEIPTS ARE NOT SUBJECTED TO THE PROVISIONS OF SECTION 115JB. 22. WE ALSO FIND THAT THE HONBLE COURT OF CALCUTTA IN THE CASE OF PR. CIT VS ANKIT METAL & POWER LTD. 416 ITR 591 HELD AS UNDER: SECOND ISSUE WHICH REQUIRES ADJUDICATION IS AS TO WHETHER THE AFORESAID INCENTIVE SUBSIDIES RECEIVED BY THE ASSES SEE FROM THE GOVERNMENT OF WEST BENGAL UNDER THE SCHEMES IN QUES TION ARE TO BE INCLUDED FOR THE PURPOSE OF COMPUTATION OF BOOK PRO FIT UNDER SECTION 115 JB OF THE INCOME TAX ACT, 1961 AS CONTENDED BY THE REVENUE BY RELYING ON THE DECISION IN THE CASE OF APOLLO TYRES LTD. VS. CIT REPORTED IN 225 ITR 273 (SC). IN THIS CASE SINCE WE HAVE ALREADY HELD THAT IN REL EVANT ASSESSMENT YEAR 2010-11 THE INCENTIVES INTEREST SUBSIDY AND POWER SUBSIDY IS A CAPITAL RECEIPT AND DOES NOT FALL WITHIN THE DEFI NITION OF INCOME UNDER SECTION 2(24) OF INCOME TAX ACT, 1961 AND WHEN A RE CEIPT IS NOT ON IN THE CHARACTER OF INCOME IT CANNOT FORM PART OF THE BOOK PROFIT UNDER SECTION 115JB OF THE ACT, 1961. IN THE CASE OF APPO LLO TYRES LTD. (SUPRA) THE INCOME IN QUESTION WAS TAXABLE BUT WAS EXEMPT UNDER A SPECIFIC PROVISION OF THE ACT AS SUCH IT WAS TO BE INCLUDED AS A PART OF THE BOOK PROFIT. BUT WHERE A RECEIPT IS NOT IN THE NATURE OF INCOME AT ALL IT CANNOT BE INCLUDED IN BOOK PROFIT FOR THE PURPOS E OF COMPUTATION UNDER SECTION 115JB OF THE INCOME TAX ACT, 1961. FO R THE AFORESAID REASON, WE HOLD THAT THE INTEREST AND POWER SUBSIDY UNDER THE SCHEMES IN QUESTION WOULD HAVE TO BE EXCLUDED WHILE COMPUTI NG BOOK PROFIT UNDER SECTION 115 JB OF THE INCOME TAX ACT, 1961. ITA NOS. 6244 TO 6247/DEL/2019 B R AGROTECH LTD. 12 23. THE SIMILAR VIEW HAS BEEN TAKEN BY VARIOUS CO-O RDINATE BENCHES OF ITAT, TO MENTION A FEW, ITAT DELHI IN TH E CASE OF MONTAGE ENTERPRISES PVT. LTD. VS. DCIT IN ITA NO 5124/DEL/2011, IN THE CASE OF MALANA POWER CO. LTD. IN ITA NO. 3957 & 1550/DEL/2015 AND ITAT MUMBAI IN THE CASE OF SHIVALIK VENTURE PVT. LTD. VS. DCIT IN ITA NO. 2008/MUM/2012 WHEREIN IT WAS HELD THAT CAPITAL SUBSIDY SHALL BE EXCLUDED IN COMPUTING BOOK PROFIT U/S 115JB OF THE ACT. 24. TO CONCLUDE, A. NOT CONSIDERING THE SUBSEQUENT INTERPRETATION OF LA W THROUGH THE JUDGMENT OF THE HONBLE SUPREME COURT O R THE HONBLE JURISDICTIONAL HIGH COURT WOULD CONSTITUTE A MISTAKE APPARENT FROM RECORD. B. THE EXCISE SUBSIDY REFUND IS TO BE TREATED AS CAPIT AL RECEIPT. C. CAPITAL RECEIPTS ARE LIABLE TO BE EXCLUDED FOR THE PURPOSE OF COMPUTATION OF BOOK PROFIT U/S 115JB. 25. IN THE RESULT, ALL THE APPEALS OF THE ASSESSEE ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 02/09/2021. SD/- SD/- (AMIT SHUKLA) (DR. B. R. R. KUMAR) JUDICIAL MEMBER AC COUNTANT MEMBER DATED: 02/09/2021 *SUBODH* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR