The Asstt. Commissioner of Income-tax, Jammu V. M/s. Shankar Industries, Jammu

MA 40/ASR/2013

• Counselvise Citation: [2013] 124 COUNSELVISE.COM (IT) 0737 (ITAT-AMRITSAR)
• Duration Of Justice: 6 month(s) 12 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 26-09-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 13-09-2013
• Assessment Year: 2005-2006
• Appeal Filed On: 15-03-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: O P GARG
• Keywords: Capital receipt
• Section: 80IB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. BEFORE SH. H.S. SIDHU, JUDICIAL MEMBER AND SH. B.P. JAIN, ACCOUNTANT MEMBER M.A. NO. 40(ASR)/2013 (I.T.A. NO. 575 (ASR)/2011) ASSESSMENT YEAR: 2005-06 PAN: AANFS4583P THE ASSISTANT COMMISSIONER VS. M/S SHANKER INDUSTRIES, OF INCOME TAX, CENTRAL CIRCLE, VILL. PATTI, T EH. SAMBA(J&K) JAMMU (APPELLANT) (RESPONDENT) APPELLANT BY: SH. TARSEM LAL, DR RESPONDENT BY: SH. O.P. GARG, ADVOCATE DATE OF HEARING: 13.09.2013 DATE OF PRONOUNCEMENT: 26.09.2013 ORDER PER BENCH 1) THE REVENUE HAS FILED THE PRESENT MISCELLA NEOUS APPLICATION FOR RECALLING OF ORDER DATED 02.07.2012 PASSED BY T HIS BENCH, BY RAISING THE FOLLOWING CONTENTIONS: TO THE ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH, AMRITSAR. SIR, 2 M.A. NO. 40(ASR)/2013 (I.T.A. NO. 575 (ASR)/2011) SUB:- FILING OF MISCELLANEOUS APPLICATION U/S 254( 2) OF THE INCOME TAX ACT, 1961 IN THE CASE OF M/S SHANKAR INDUSTRIES, VILL. PATTI, TEH. SAMBA, JAMMU FOR T HE A.Y. 2005-06- REG. KINDLY REFER THE ABOVE SUBJECT. IN THIS CONNECTION, IT IS SUBMITTED THAT THE PRESE NT APPEAL IS FILED AGAINST THE ORDER OF HON'BLE I.T.A.T. IN T HE CASE OF M/S SHANKAR INDUSTRIES, VILL. PATTI, TEH SAMBA, JAMMU FOR THE A.Y. 2005-06. IN THIS CASE, THE HON'BLE I.T.A.T. VIDE ITS ORDER PASSED IN I.T.A. NO. 575(ASR)/2011 DATED 02.07.2012 HAS DISMISSED THE APPEAL OF THE REVENUE. IN THIS CASE, THE ASSESSMENT WAS COMPLETED U/S 143( 3) OF THE I.T. ACT, 1961 VIDE ORDER DATED 29.08.2007 AND AN ADDITION OF RS. 38,73,678/- WAS MADE ON ACCOUNT OF RECEIPT O F EXCISE REFUND RECEIVED FROM EXCISE DEPARTMENT. HOWEVER, TH E LEARNED CIT(A) DELETED THE ADDITION BY HOLDING THAT THE EXC ISE DUTY REFUND IS TO BE TREATED AS CAPITAL RECEIPT. THE A .O. WAS DIRECTED TO RE-COMPUTE RELIEF ALLOWABLE U/S 80IB OF THE I.T. ACT, 1961. BEING AGGRIEVED BY THE ORDER OF THE LEARNED CIT(A), SECOND APPEAL WAS FILED BY THE DEPARTMENT ON THE FO LLOWING ISSUES:- (I) THAT THE LEARNED CIT(A) HAS ERRED BOTH IN LAW AND ON FACT IN TREATING THE RECEIPT OF CENTRAL EXCISE DUTY REFU ND AND INTEREST SUBSIDY AS A CAPITAL RECEIPT AS AGAINST IT S TREATMENT AS REVENUE RECEIPT BY THE A.O. IGNORING THE FACT THAT IS WAS NEITHER MEANT FOR THE PURPOSE OF SUBSTANTIAL EXPANSION OF I NDUSTRY NOR IT WAS WITH A VIEW TO ENABLE THE SETTING UP OF THE NEW INDUSTRY. (II) THAT THE LEARNED CIT(A) HAS ERRED BOTH IN LAW AND ON FACTS IN ALLOWING THE DEDUCTION U/S 80IB ON THE INC OME ARISING ON ACCOUNT OF EXCISE DUTY REFUND BY TREATING IT AS CAPITAL RECEIPT. 3 M.A. NO. 40(ASR)/2013 (I.T.A. NO. 575 (ASR)/2011) THE HON'BLE TRIBUNAL VIDE ORDER DATED 02.07.2012 PA SSED IN APPEAL I.T.A. NO. 575(ASR)/2011 DISMISSED THE APPEAL FILED BY THE REVENUE AFTER DISCUSSING THE GROUNDS OF APPE AL NO. (I) & (II) WITH THE FOLLOWING OBSERVATIONS:- WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE RELEVANT MATERIAL WITH US ESPECIALLY THE IMPUGNED O RDER. WE ARE OF THE VIEW THAT THE LEARNED FIRST APPELLATE AU THORITY HAS RIGHTLY TREATED THE RECEIPT OF CENTRAL EXCISE DUTY REFUND AND INTEREST SUBSIDY AS A CAPITAL RECEIPT AS AGAINST ITS TREATMENT AS REVENUE RECEIPT BY THE A.O. IN ADDITION TO THA T THE ISSUE HAS ALSO BEEN ADJUDICATED AND DECIDED BY THE HON'BL E JAMMU & KASHMIR HIGH COURT IN THE CASE OF SHREE BALAJI AL LOYS VS. CIT AND ANOTHER (2011) 333 ITR 335 (J&K) AS WELL AS BY THE HON'BLE JURISDICTIONAL COURT IN THE CASE OF M/S MEP CO INDIA LTD. 2009(7) SUPREME 564 WHEREIN IT HAS BEEN HELD A S UNDER: FOR ALL WHAT HAS BEEN SAID ABOVE, THE FINDING OF T HE TRIBUNAL ON THE FIRST ISSUE THAT THE EXCISE DUTY RE FUND, INTEREST SUBSIDY AND INSURANCE SUBSIDY WERE PRODUCTION INCEN TIVES, HENCE REVENUE RECEIPT CANNOT BE SUSTAINED, BEING AG AINST THE LAW LAID DOWN BY HON'BLE SUPREME COURT OF INDIA IN SAHNEY STEEL AND PONNI SUGAR CASES (SUPRA) KEEPING IN VIEW THE ABOVE SAID DISCUSSION, THE ISSU ES INVOLVED IN GROUND NOS. 1 & 2 ARE DISMISSED. IN THIS CONNECTION, IT IS SUBMITTED THAT IN THE RET URN OF INCOME FILED ON 24.10.2005, THE ASSESSEE HAD ITSELF REFLECTED RS. 38.73 LACS RECEIVED AS EXCISE DUTY REFUND AS MISC. INCOME IN THE PROFIT AND LOSS ACCOUNT, HENCE REVENUE RECEIPT. WHEREAS THE SAME HAS BEEN TREATED BY THE LEARNED CIT(A), JAMMU, AS CAPITAL RECEIPT. IT APPEARS THAT THE LEARNED CIT(A) , HAS NOT ADJUDICATED THIS POINT. IN THE LIGHT OF FACTS, THE MISCELLANEOUS APPLICATION IS FILED WITH THE PRAY TO RECALL THE OR DER PASSED IN APPEAL I.T.A. NO. 575(ASR)/2011 DATED 02.07.2012 FO R REVIEW BEFORE THE HON'BLE TRIBUNAL ON THE BASIS OF FOLLOWI NG FACTS: 4 M.A. NO. 40(ASR)/2013 (I.T.A. NO. 575 (ASR)/2011) (I) THE LEARNED CIT(A), JAMMU HAS TREATED AN AMOUN T OF RS. 38.73 LACS RECEIVED AS EXCISE DUTY REFUND AS CAPITA L RECEIPT WHEREAS THE SAME HAS BEEN SHOWN BY THE ASSESSEE AS REVENUE RECEIPT BY TAKING IT AS MISC. INCOME IN THE PROFIT AND LOSS ACCOUNT. YOURS FAITHFULLY, SD/- (SATBIR SINGH) ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE, JAMMU 2) LEARNED COUNSEL FOR THE ASSESSEE CONTROVERTED TH E ARGUMENTS ADVANCED BY LEARNED DR AND STATED THAT LEARNED DR H AS NOT POINTED OUT ANY MISTAKE IN THE ORDER DATED 02.07.2012 PASSED BY THIS BENCH. THEREFORE, THE PRESENT MISCELLANEOUS APPLICATION FI LED BY THE REVENUE MAY BE DISMISSED. 3) WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE R ELEVANT RECORDS AVAILABLE WITH US, ESPECIALLY THE CONTENTIONS RAISE D BY THE ASSESSEE IN THE IN THE MISCELLANEOUS APPLICATION, WHICH ARE REPRODU CED ABOVE. 4) KEEPING IN VIEW THE FACTS AND CIRCUMSTANCES OF T HE PRESENT CASE AND THE ORDER PASSED BY THIS BENCH DATED 02.07.2012 , WE ARE OF THE CONSIDERED VIEW THAT THE REVENUE HAS NOT POINTED OU T ANY MISTAKE IN THE ORDER DATED 02.07.2012, WHICH HAS BEEN PASSED BY TH IS BENCH BY FOLLOWING THE ORDER OF HON'BLE JAMMU & KASHMIR HIGH COURT IN THE CASE OF SHREE BALAJI ALLOYS VS. CIT AND ANOTHER (2011) 3 33 ITR 335 (J&K) AS 5 M.A. NO. 40(ASR)/2013 (I.T.A. NO. 575 (ASR)/2011) WELL AS BY THE HON'BLE JURISDICTIONAL COURT IN THE CASE OF M/S MEPCO INDIA LTD. 2009(7) SUPREME COURT 564. THE CONTENTIO NS RAISED BY THE REVENUE IN THE PRESENT MISCELLANEOUS APPLICATION AR E NOT REASONABLE, AS SUCH, THIS BENCH IS UNABLE TO RECALL THE ORDER DATE D 02.07.2012 AS IT HAS BEEN PASSED BY THIS BENCH BY RESPECTFULLY FOLLOWING THE ORDER OF HON'BLE JAMMU & KASHMIR HIGH COURT IN THE CASE OF SHREE BAL AJI ALLOYS (SUPRA). WITH THE AFORESAID OBSERVATIONS, THE MISCELLANEOUS APPLICATION IS DISMISSED. 5) IN THE RESULT, THE MISCELLANEOUS APPLICATION FIL ED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 26 TH SEPTEMBER, 2013 SD/./- SD/./- (B.P. JAIN) (H.S. SIDHU) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 26 TH SEPTEMBER, 2013 /RK/ COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE: M/S SHANKER INDUSTRIES, VILL. PATTI, TEH. SAMBA(J&K) 2. THE ACIT, CENTRAL CIRCLE, JAMMU 3. THE CIT(A), JAMMU 4. THE CIT, JAMMU 5. THE SR DR, I.T.A.T., ASR TRUE COPY BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH: AMRITSAR.