Seshasayee Paper & Boards Ltd., Erode V. ACIT Namakkal Circle, Namakkal

ITA 789/CHNY/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 4968 (ITAT-CHENNAI)
• Duration Of Justice: 10 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-02-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Appeal Filed On: 25-03-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: G BASKAR
• Keywords: Capital receipt; Set aside

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL , D B ENCH, CHENNAI, CAMP AT COIMBATORE. ... , ! '#, $ #% BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI S. JAYARAMAN, ACCOUNTANT MEMBER ./ I.T.A.NO.789/CHNY/2019 ( / ASSESSMENT YEAR: 2013-14) M/S. SESHASAYEE PAPER & BOARDS LTD, CAUVERY R.S.P.O. PALLIPALAYAM, ERODE VS THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-1, NAMAKKAL. PAN: AACCS 1192G ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : SHRI G. BASKAR, ADVOCATE /RESPONDENT BY : SHRI AR.V. SREENIVASAN, JCIT, /DATE OF HEARING : 04.02.2020 ! /DATE OF PRONOUNCEMENT : 04.02.2020 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER : THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST TH E ORDER PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS), SALEM DAT ED 17.01.2019 AND PERTAINS TO THE ASSESSMENT YEAR 2013-2014. 2 I.T.A. NO.789/CHNY/2019 2. THE FIRST ISSUE ARISES FOR CONSIDERATION IS COMP ENSATORY INTEREST PAID BY THE CENTRAL EXCISE DEPARTMENT ON REFUND OF TAX CREDIT. 3. SHRI. G. BASKAR, THE LD. COUNSEL FOR THE ASSES SEE SUBMITTED THAT TAX CREDIT TO THE EXTENT OF RS.15,49,280/- IS A CAP ITAL RECEIPT AND IT IS NOT CHARGEABLE TO TAX. IN FACT THE ASSESSING OFFICER H IMSELF TREATED THE TAX CREDIT AS CAPITAL RECEIPT. THE DISPUTE IS ONLY WITH REGARD TO RS.63,52,046/- TOWARDS INTEREST AS THE TAX CREDIT OF =15,49,280/-. SINCE THE TAX CREDIT ITSELF IS A CAPITAL RECEIPT, THE INTEREST ON THE TA X CREDIT SHOULD ALSO TAKE THE SAME COLOUR. THEREFORE, INTEREST ON TAX CREDIT IS ALSO A CAPITAL RECEIPT AND NOT TAXABLE. THE LD. COUNSEL FURTHERANCE PL ACED RELIANCE ON THE JUDGMENT OF THE BOMBAY HIGH COURT IN THE CASE OF RUPESH RASHMIKANT SHAH VS. UNION OF INDIA, (2019) 108 TAXMANN.COM 181 (BOMBAY ). 4. THE NEXT GROUND OF APPEAL RELATES TO COMPUTATION OF BOOK PROFIT U/S.115JB OF THE INCOME TAX ACT, 1961 (IN SHORT T HE ACT). ACCORDING TO THE LD. COUNSEL, THIS GROUND WAS SPECIFICALLY RAISE D BEFORE THE CIT(A) AS GROUND NO.7. HOWEVER, THE SAME WAS NOT DISPOSED OF F. THEREFORE, THIS GROUND MAY BE REMITTED BACK TO THE FILE OF THE CIT (A). THE ASSESSEE HAS TAKEN ONE MORE GROUND WITH REGARD TO THE CARRY FORW ARD OF LOSSES TO THE NEXT ASSESSMENT YEAR. 3 I.T.A. NO.789/CHNY/2019 5. ON THE CONTRARY, SHRI AR.V. SREENIVASAN, THE LD . DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT INTEREST OF RS.63,52, 046/- IS FOR DELAYED REFUND OF TAX CREDIT BY THE CUSTOMS AND CENTRAL EXC ISE DEPARTMENT AND THEREFORE IT IS A REVENUE RECEIPT WHICH IS LIABLE FOR TAXATION. AS FAR AS COMPUTATION OF BOOK PROFIT U/S.115JB OF THE ACT IS CONCERNED, EVEN THOUGH SPECIFIC GROUND WAS RAISED BY THE ASSESSEE, THE CIT (A) HAS NOT DISPOSED OFF. THEREFORE, THE MATTER MAY BE REMITTED BACK TO THE FILE OF THE CIT(A). THE NEXT GROUND IS WITH REGARD TO CARRY FORWARD OF LOSSES. THE LD. DR SUBMITTED THAT THIS MATTER MAY BE DECIDED BY THE TR IBUNAL ON MERITS. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EIT HER SIDE AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THIS TRIB UNAL IS OF THE CONSIDERED OPINION THAT EVEN THOUGH THE ASSESSEE HA S RAISED SPECIFIC GROUND WITH REGARD TO COMPUTATION OF BOOK PROFIT U /S.115JB OF THE ACT IN GROUND NO.7, IT WAS NOT DISPOSED OFF BY THE CIT(A). IT NEEDS TO BE DISPOSED OFF BY THE CIT(A) AT THE FIRST INSTANCE. WHETHER INTEREST ON TAX CREDIT GIVEN BY THE CUSTOM AND EXCISE DEPARTMENT I S A REVENUE RECEIPT OR CAPITAL RECEIPT ARE ALSO NEEDS TO BE RE-EXAMINED BY THE CIT(A). SINCE MAJOR TWO ISSUES ARE REMITTED BACK TO THE FILE OF T HE CIT(A), THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT CARRY FORWARD LOS S TO THE NEXT ASSESSMENT YEAR ALSO NEEDS TO BE RE-EXAMINED BY THE CIT(A). AC CORDINGLY, ORDERS OF 4 I.T.A. NO.789/CHNY/2019 BOTH THE AUTHORITIES BELOW ARE SET ASIDE AND ALL THE ISSUES ARE REMITTED BACK TO THE FILE OF THE COMMISSIONER OF INCOME TAX (APPEALS) FOR FRESH CONSIDERATION. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IN ITA NO.789/CHNY/2019 FOR ASSESSMENT YEAR 2013-2014 IS A LLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE COURT ON 4 TH FEBRUARY, 2020 AT CAMP AT COIMBATORE SD/- SD/- ( ) (S. JAYARAMAN) /ACCOUNTANT MEMBER ( . . . ) (N.R.S. GANESAN) /JUDICIAL MEMBER /COIMBATORE, /DATED, THE 4 TH FEBRUARY, 2020. KV '# $%&% /COPY TO: 1. /APPELLANT 2. /RESPONDENT 3. ) ( )/CIT(A) 4. ) /CIT 5. %*+ , /DR 6. +-. /GF