The Income-tax Officer, Pathankot V. M/s. Rajasthan Cement Industries, Pathankot

ITA 674/ASR/2014

• Counselvise Citation: 67420914 RSA 2014
• Duration Of Justice: 3 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-03-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2005-2006
• Appeal Filed On: 05-11-2014
• 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. A.D. JAIN, JUDICIAL MEMBER AND SH. B.P. JAIN, ACCOUNTANT MEMBER I.T.A. NO. 674(ASR)/2014 ASSESSMENT YEAR: 2005-06 PAN: AAGFR5492P THE INCOME TAX OFFICER, WARD -2, PATHANKOT VS. M/S. RAJSTHAN CEMENT INDUSTRIES, KATHUA HO. INDIRA COLONY PATHANKOT . (APPELLANT) (RESPONDENT) APPELLANT BY: SH. TARSEM LAL, DR RESPONDENT BY: NONE DATE OF HEARING: 02.03.2015 DATE OF PRONOUNCEMENT: 03.03.2015 ORDER PER A.D.JAIN, JM. THIS IS DEPARTMENTS APPEAL FOR THE ASSESSMENT YEAR 2005-06 AGAINST THE ORDER OF THE CIT(A), AMRITSAR, DATED 22.08.2014 , DELETING THE ADDITION/DISALLOWANCE OF RS.17,68,061/- MADE BY TH E AO U/S 80IB OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT), ON CENTR AL EXCISE DUTY REFUND, TREATING IT TO BE A REVENUE RECEIPT NOT DIRECTLY AT TRIBUTABLE TO THE INDUSTRIAL ACTIVITIES OF THE ASSESSEE-FIRM. 2. THE NOTICE SENT TO THE ASSESSEE BY RPAD HAS BEEN DULY SERVED AND THE ACKNOWLEDGMENT RECEIPT HAS BEEN RECEIVED IN THE REG ISTRY. HOWEVER, NONE 2 I.T.A. NO. 674 (ASR)/2014 ASSESSMENT YEAR: 2005-06 HAS COME PRESENT BEFORE US ON BEHALF OF THE ASSESSE E. WE ARE, THEREFORE, PROCEEDING TO DECIDE THE APPEAL, HAVING HEARD THE LD. DR. 3. THE ASSESSING OFFICER MADE THE DISALLOWANCE IN ORD ER TO FOLLOW THE CONSISTENCY OF THE STAND AS TAKEN BY THE DEPARTMENT IN OTHER CASES. THE ASSESSING OFFICER OBSERVED THAT THE DECISION IN THE CASE OF M/S SHREE BALAJI ALLOYS AND ORS. VS. CIT , 333 ITR 335 (J&K), WHICH HAS GONE IN FAVOUR OF THE ASSESSEE, HAD NOT BEEN ACCEPTED BY THE DEPARTME NT AND THE DEPARTMENTS SPECIAL LEAVE PETITION WAS HITHERTO PENDING BEFORE THE HONBLE SUPREME COURT. 4. THE LEARNED CIT(A) DELETED THE DISALLOWANCE, FOL LOWING THE JUDGMENT OF THE HONBLE J & K HIGH COURT, IN THE CA SE OF M/S. BALAJI ALLOYS AND OTHERS VS. CIT (SUPRA), WHERE I T HAS BEEN HELD THAT EXCISE DUTY REFUND AND TRANSPORT SUBSIDY IN PU RSUANCE TO THE INCENTIVE ALLOWANCE BY THE GOVERNMENT PERTAINING TO INDUSTRIAL POLICY INTRODUCED IN THE STATE OF J & K ARE CAPITAL RECEIPT. 5. CHALLENGING THE IMPUGNED ORDER, THE LEARNED DR H AS CONTENDED THAT THE LEARNED CIT(A) HAS ERRED IN DELE TING THE ADDITION CORRECTLY MADE BY THE ASSESSING OFFICER BY DISALLOWING THE DEDUCTION UNDER SECTION 80IB OF THE ACT, ON EXC ISE DUTY REFUND, TREATING IT TO BE A REVENUE RECEIPT NOT DIR ECTLY ATTRIBUTABLE 3 I.T.A. NO. 674 (ASR)/2014 ASSESSMENT YEAR: 2005-06 TO THE INDUSTRIAL ACTIVITIES OF THE ASSESSEE; THAT WHILE DOING SO, THE LEARNED CIT(A) HAS ERRED IN FOLLOWING THE JUDGM ENT OF HONBLE J & K HIGH COURT, IN THE CASE OF M/S. BALA JI ALLOYS AND OTHERS VS. CIT (SUPRA), WHICH DECISION HAS NOT BEEN ACCEPTED BY THE DEPARTMENT AND THE APPEAL FILED AGA INST THIS DECISION BEFORE THE HONBLE SUPREME COURT, IS STILL PENDING; AND THAT THE LEARNED CIT(A) HAS ERRED IN NOT APPRECIATI NG THE JUDGMENTS OF THE HONBLE SUPREME COURT IN SAHNEY S TEEL AND PRESS WORKS LTD. VS. CIT , 228 ITR 253 (SC) AND C IT VS. PONNY SUGARS AND CHEMICALS LTD. , 306 ITR 392 (SC) ; WHEREIN, THE HONBLE SUPREME COURT HAS HELD SUCH RECEIPTS TO BE REVENUE RECEIPTS. 6. NONE APPEARED ON BEHALF OF THE ASSESSEE. 7. HAVING HEARD THE LD. DR AND IN THE LIGHT OF THE MATERIAL PLACED ON RECORD, WE ARE OF THE VIEW THAT THE ISSU E AT HAND IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY DECIS ION OF THE HONBLE JURISDICTIONAL HIGH COURT OF JAMMU AND KASH MIR, IN THE CASE OF IN THE CASE OF SHREE BALAJI ALLOYS (SUPR A). SHREE BALAJI ALLOYS(SUPRA), HOLDS, INTER ALIA, THAT EXCI SE DUTY REFUND IS A CAPITAL RECEIPT. THIS JUDGMENT, IT IS SEEN, HAS B EEN PASSED AFTER 4 I.T.A. NO. 674 (ASR)/2014 ASSESSMENT YEAR: 2005-06 DULY TAKING INTO CONSIDERATION THE CASES OF SAHNEY STEEL AND PRESS WORKS LTD.(SUPRA) AND PONNY SUGARS AND CHEM ICALS LTD.(SUPRA). THE ISSUE HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE FOLLOWING THE CASE OF MEPCO INDUSTRIES LT D. VS. CIT, 319 ITR 208 (SC), WHEREIN, BOTH SAHNEY STEEL AND P RESS WORKS LTD.(SUPRA) AND PONNY SUGARS AND CHEMICALS LTD. (SUPRA) WERE CONSIDERED. 8. AS SUCH, THE DEPARTMENT IS WRONG IN CONTENDING T HAT THE LEARNED CIT(A) HAS ERRED IN DECIDING THE ISSUE IN F AVOUR OF THE ASSESSEE BY FOLLOWING THE DECISION IN THE CASE HON BLE J & K HIGH COURT, IN THE CASE OF M/S. BALAJI ALLOYS AND OTHERS VS. CIT (SUPRA), AND THAT THE LEARNED CIT(A) HAS ERRED IN NOT APPRECIATING THE CASES OF SAHNEY STEEL AND PRESS W ORKS LTD.(SUPRA) AND PONNY SUGARS AND CHEMICALS LTD. (SUPRA). 9. WE HAVE ALSO TAKEN THE ABOVE VIEW, IN SIMILAR FA CTS AND CIRCUMSTANCES, IN INCOME TAX OFFICER, WARD-3, PATH ANKOT VS. M/S. T.K. PAPER MILLS, CHACK SAKTA, KATHUA, H.O.- P ATHANKOT, IN ITA NO.106(ASR)/2014, FOR A.Y. 2010-11, VIDE ORD ER DATED 05.08.2014. 5 I.T.A. NO. 674 (ASR)/2014 ASSESSMENT YEAR: 2005-06 10. FOR THE ABOVE DISCUSSION, THE GROUNDS TAKEN BY THE DEPARTMENT ARE FOUND TO BE SHORN OF MERIT, AND ARE, HENCE, REJECTED. 11. THEREFORE, FINDING NO ERROR, WHATSOEVER THEREIN , THE LEARNED CIT(A)S ORDER UNDER APPEAL IS UPHELD. 12. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 3 RD MARCH, 2015. SD/- SD/- (B.P. JAIN) (A.D. JAIN) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 03.03.2015 /PK/ COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE: M/S. RAJASTHAN CEMENT INDUSTRIES, KAT HUA , HO. INDIRA COLONY PATHANKOT 2. INCOME TAX OFFICER, WARD-2, PATHANKOT 3. THE CIT(A) 4. THE CIT 5. THE SR DR, I.T.A.T., ASR TRUE COPY BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH: AMRITSAR.