Shivam Metal Shaper Industries,, Jammu vs Assessee

The Deputy Commissioner of Vs. M/s. Shivam Metal Shaper Income Tax, Central Circle, Industries, G.T. Road, Gnagyal, Jammu. Jammu. (Appellant) (Respondent)

Cross Objection No.18 (Asr)/2014 Arising out of ITA No.260 (Asr)/2014 Assessment Year: 2008-09

M/s. Shivam Metal Shaper Vs. The Deputy Commissioner of Industries, G.T. Road, Gnagyal, Income Tax, Central Circle, Jammu. Jammu. (Cross Objector) (Respondent)

Appellant by: Smt. Ratinder Kaur, DR Respondent by: Sh. Tarun Bansal Date of hearing: 03.03.2015 Date of pronouncement: 03.03.2015

ORDER

PER BENCH :

ITA No.260(Asr)/2014

This is Department's appeal for the assessment year 2008-09 against the order

of the CIT(A), Ludhiana, dated 10.02.2014, deleting the addition/disallowance of 2 ITA No. 260 (Asr)/2014

Assessment Year 2008-09

Rs.25,54,802/- made by the AO u/s 80IB of the Income Tax Act, 1961 (In short 'the

Act'), on Central Excise Duty Refund, treating it to be a revenue receipt not directly

attributable to the industrial activities of the assessee-firm.

2. The Department has filed an application for adjournment. However, finding

that the matter can be proceeded with, we are doing so, rejecting the application.

3. The Assessing Officer made the disallowance 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.

4. The learned CIT(A) deleted the disallowance, following the

judgment of the Hon'ble J & K High Court, in the case of 'M/s. Balaji

Alloys and others vs. CIT' (supra), where it has been held that excise

duty refund and other subsidies in pursuance 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 has contended

that the learned CIT(A) has erred in deleting the addition correctly made 3 ITA No. 260 (Asr)/2014

Assessment Year 2008-09

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 judgment of Hon'ble J & K High Court, in the case of 'M/s. Balaji

Alloys and others vs. CIT' (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.

6. The ld. Counsel for the assessee has relied on the impugned order.

7. Having heard 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 Balaji Alloys(supra), 4 ITA No. 260 (Asr)/2014

Assessment Year 2008-09

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.

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

(supra).

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

circumstances, in 'Income Tax Officer, Ward-3, Pathankot vs. M/s. T.K.

Paper Mills, Chack Sakta, Kathua, H.O.- Pathankot', in ITA

No.106(Asr)/2014, for A.Y. 2010-11, vide order dated 05.08.2014. 5 ITA No. 260 (Asr)/2014

Assessment Year 2008-09

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.

C.O. No.18 (Asr)/2014

12. The C.O. of the assessee is supportive of the impugned order. It is dismissed as infructuous.

13. In the result, both the appeal of the Revenue as well as C.O. of the assessee are dismissed.

Order pronounced in the open court on 3rd 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 Shivam Metal Shaper Industries, G.T. Road, Gnagyal, Jammu.

2. The Dy. Commissioner of Income Tax, Central Circle, Jammu.

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.