Bharat Udyog,, Pathankot vs Department Of Income Tax

Dy.Commissioner of Income-tax, vs. M/s. Bharat Udyog, SICOP Circle VI, Industries,, Kathua (J&K) Pathankot. H.O. Dalhousie Road, Pathankot. (Appellant) (Respondent)

Appellant by:Sh.Tarsem Lal, DR Respondent by:None

Date of hearing:26/02/2015 Date of pronouncement:26/02/2015

ORDER

PER A.D.JAIN,JM:

This is Department's appeal for the assessment year 2011-12 against

the order of the CIT(A), Amritsar, dated 22.08.2014, deleting the addition of

Rs.61,50,375/- made by the AO u/s 80IB of the Income Tax Act, 1961 (In

short 'the Act'), on excise duty refund, treating it to be a revenue receipt

not directly attributable to the industrial activities of the assessee-firm. 2 ITA No.651(Asr)/2014

2. The Assessing Officer made the addition in order 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 department and the department's

Special Leave Petition was hitherto pending before the Hon'ble Supreme

Court.

3 The learned CIT(A) deleted the addition, following the

Tribunal's order dated 05.08.2014 in the case of ITO vs. T.K.

Paper Mills, Kathua in ITA No.106(Asr)/2014 for the A.Y. 2010-

11.

4. Challenging the impugned order, the learned DR has

contended that the learned CIT(A) has erred in deleting the

addition correctly made by the Assessing Officer by disallowing

the deduction under Section 80IB of the Act, on excise duty

refund, treating it to be a revenue receipt not directly

attributable to the industrial activities of the assessee; that

while doing so, the learned CIT(A) has erred in following the

Tribunal's decision in the case of ITO vs. T.K. Paper Mills, 3 ITA No.651(Asr)/2014

Kathua (supra) which decision has not been accepted by the

department and the appeal filed against this decision before the

Hon'ble Supreme Court, is still pending and that the learned

CIT(A) has erred in not appreciating the judgments of the

Hon'ble Supreme Court in 'Sahney Steel and Press Works Ltd. Vs.

CIT', 228 ITR 253 (SC) and 'CIT Vs. Ponny Sugars and Chemicals

Ltd.' , 306 ITR 392 (SC); wherein, the Hon'ble Supreme Court has

held such receipts to be revenue receipts.

5. The notice issued to the assessee has returned unserved

with the note of the Postal Authority that the assessee would

not be found in the premises at the given address. As a

consequence, none has put in appearance before us on behalf of

the assessee. However, finding that the matter can be

proceeded with in the absence of the assessee, we are doing so.

6. Having considered the rival contentions in the light of the

material placed on record, we are of the view that the issue at

hand is squarely covered in favour of the assessee by decision of

the Hon'ble Jurisdictional High Court of Jammu and Kashmir, in

the case of in the case of 'Shree Balaji Alloys' (supra). 'Shree 4 ITA No.651(Asr)/2014

Balaji All).oys' (supra), holds, inter alia, that excise duty refund

is a capital receipt. This judgment, it is seen, has been passed

after duly taking into consideration the cases of 'Sahney Steel

and Press Works Ltd.'(supra) and 'Ponny Sugars and Chemicals

Ltd.'(supra). The issue has been decided in favour of the

assessee following the case of 'Mepco Industries Ltd. Vs. CIT',

319 ITR 208 (SC), wherein, both 'Sahney Steel and Press Works

Ltd.'(supra) and 'Ponny Sugars and Chemicals Ltd.' (supra) were

considered.

7. As such, the department is wrong in contending that the

learned CIT(A) has erred in deciding the issue in favour of the

assessee by following the decision in the case of ITO vs. T.K.

Paper Mills, Kathua (supra) of the ITAT, Amritsar Bench and that

the learned CIT(A) has erred in not appreciating the cases of

'Sahney Steel and Press Works Ltd.'(supra) and 'Ponny Sugars

and Chemicals Ltd.' (supra).

8. We have also taken the above view, in similar facts and

circumstances, in 'Income Tax Officer, Ward-3, Hoshiarpur

vs.Sh.Vijay Kumar Sharma L/H Mrs. Veena Sharma Prop. Hari 5 ITA No.651(Asr)/2014

Narain Industries, Hoshiarpur, in ITA No.541(Asr)/2014, for A.Y.

2010-11, vide order dated 13.02.2014.

9. For the above discussion, the sole ground taken by the

department is found to be shorn of merit, and is, hence,

rejected.

10. Therefore, finding no error, whatsoever therein, the learned CIT(A)'s

order under appeal is upheld.

11. In the result, the appeal of the department is dismissed.

Order pronounced in the open court on 26th February, 2015.

(B.P. JAIN) (A.D.JAIN) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 26th February, 2015 /SKR/ Copy of the order forwarded to:

1. The Assessee:M/s. Bharat Udyog, SICOP Industries, Kathua, H.P. Pathankot.

2. The DCIT, Cir.VI, Pathankot

3. The CIT(A), Asr

4. The CIT, Asr.

5. The SR DR, ITAT, Amritsar.

True copy By order

(Assistant Registrar) Income Tax Appellate Tribunal, Amritsar Bench: Amritsar.