The Asstt. Commissioner of Income-tax, Phagwara V. M/s Sukhjit Starch & Chemicals Ltd, Kapurthala

ITA 765/ASR/2014

• Counselvise Citation: [2015] 120 COUNSELVISE.COM (IT) 9750 (ITAT-AMRITSAR)
• Duration Of Justice: 5 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-06-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 04-06-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 23-12-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: Y K SUD
• Keywords: Capital receipt
• Section: 80IB

Judgement Text

IN THE INCOME TAX APPELLATE TRI BUNAL AMRITSAR BENCH; AMRITSAR. BEFORE SH. PRAMOD KUMAR, ACCOUNTANT MEMBER AND SH. A.D.JAIN, JUDICIAL MEMBER I.T.A. NO. 765/ASR/2014 ASSESSMENT YEAR: 2009-10 PAN : AACCS7733H ASSISTANT COMMISSIONER OF INCOME TAX, PHAGWARA CIRCLE, PHAGWARA VS. M/S SUKHJIT STARCH & CHEMICALS LTD. SARAI ROAD, PHAGWARA, KAPURTHALA (PUNJAB) (APPELLANT) (RESPONDENT) APPELLANT BY: SH. Y.K. SUD RESPONDENT BY: SH. TARSEM LAL DATE OF HEARING: 04.06.2015 DATE OF PRONOUNCEMENT: 12.06.2015 ORDER PER A.D.JAIN (JM): THIS IS DEPARTMENTS APPEAL FOR AY 2009-10 AGAINST THE ACTION OF THE LD. CIT(A) IN DIRECTING THE AO TO DELETE THE ADDITI ON OF RS. 15,32,260/- MADE UNDER SECTION 80IB OF THE INCOME TAX ACT. 2. WHILE DELETING THE ADDITION MADE BY THE AO, THE LD. CIT(A) OBSERVED THAT A SIMILAR ADDITION AS INTEREST INCENT IVE INCOME, MADE FOR AYS 2007-08 AND 2008-09, HAD BEEN DELETED BY THE ITAT, AMRITSAR BENCH, IN THE CASE OF THE ASSESSEE COMPANY ITSELF, AND FOLLOWING THAT ORDER OF THE TRIBUNAL, I.T.A. NO. 765/ASR/2014 ASSESSMENT YEAR: 2009-10 2 THE DISALLOWANCE OF THE TAX FOR THE YEAR UNDER CONS IDERATION WAS ALSO BEING DELETED. 3. IN THE SAID TRIBUNAL ORDER, IN THE ASSESSEES CA SE FOR AY 2007-08 AND 2008-09, WE FIND THAT THE TRIBUNAL, FOLLOWING THE D ECISION IN THE CASE OF M/S SHREE BALAJI ALLOYS, 333 ITR 335(J&K), HELD T HAT THE AMOUNT RECEIVED ON ACCOUNT OF EXCISE DUTY REFUND WAS A CAPITAL RECE IPT NOT LIABLE TO TAX UNDER THE PROVISIONS OF INCOME TAX ACT 1961. 4. THUS, EVIDENTLY, IN M/S SHREE BALAJI ALLOYS, ( SUPRA) THE SUBSIDY / REFUND HAVE BEEN HELD TO BE A CAPITAL RECEIPT. NOW, ONCE THAT IS SO, OBVIOUSLY, IT CANNOT BE THE OPERATIONAL INCOME OF T HE ASSESSEE. THEREFORE, THE LD. CIT(A) HAS GONE WRONG IN DELETING THE DISALLOWA NCE CORRECTLY MADE UNDER SECTION 80IB OF THE ACT. TO THIS EXTENT THE G RIEVANCE OF THE DEPARTMENT IS JUSTIFIED AND IS ACCEPTED AS SUCH. HOWEVER, THIS ASPECT OF THE MATTER IS PURELY ACADEMIC BECAUSE ONCE IT IS HELD TO BE CAPIT AL RECEIPT, IT IS OUTSIDE THE SCOPE OF INCOME WHICH COULD BE BROUGHT TO TAX IN TH E HANDS OF THE ASSESSEE, WHETHER A RECEIPT IS NOT TAXABLE AS INCOME AT ALL O R WHETHER IT IS FIRST INCLUDED IN TAXABLE INCOME AND THEN EXCLUDED BY THE VIRTUE O F AN INCENTIVE PROVISION, NET EFFECT IS THE SAME. REVENUE DERIVES NO ADVANTAG E FROM OUR FINDINGS IN THIS RESPECT. I.T.A. NO. 765/ASR/2014 ASSESSMENT YEAR: 2009-10 3 5. IN THE RESULT, EVEN WHILE GRIEVANCE RAISED BY TH E REVENUE ACADEMICALLY IS CORRECT IN PRINCIPLE, THE APPEAL IS DISMISSED AS INFRUCTUOUS. ORDER PRONOUNCED IN THE OPEN COURT ON 12 /06/201 5. SD/- SD/- (PRAMOD KUMAR) ( A.D. JAIN) ACCOUNTANT MEMBER JUDIC IAL MEMBER DATED: 12.06.2015 AG COPY TO: 1.THE APPELLANT, 2. THE RESPONDENT, 3. THE CIT, 4. THE CIT(A), 5. THE DR BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH: AMRITSAR