Vijay Kumar Sharma,, Hoshiarpur vs Department Of Income Tax

Income Tax Officer, vs. Sh. Vijay Kumar Sharma, Ward-3, Hoshiarpur. L/H Mrs. Veena Sharma Prop. Hari Narain Industries, Krishna Nagar, Hoshiarpur. (Appellant) (Respondent)

Appellant by:Sh.Tarsem Lal, DR Respondent by:Sh.J.S.Bhasin, Advocate

Date of hearing:09/02/2015 Date of pronouncement:13/02/2015

ORDER

PER A.D.JAIN,JM:

This is Department's appeal for the assessment year 2010-11 against

the order of the CIT(A), Jalandhar, dated 19.06.2014, deleting the

addition/disallowance of Rs.60,51,511/- made by the AO u/s 80IB of the

Income Tax Act, 1961 (In short 'the Act'), on excise duty refund, treating it 2 ITA No.541(Asr)/2014

to be a revenue receipt not directly attributable to the industrial activities

of the assessee-firm.

2. 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.

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

Tribunal's order in the case of Sh. Vinod Kumar Jain Prop. M/s.

V.K. Metal Works ( ITA No.65(Asr)/2010) and M/s. Balaji Resin

Industries (ITA No.68(Asr)/2010) dated 26.10.2012.

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 3 ITA No.541(Asr)/2014

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

Tribunal's decision in the case of Sh. Vinod Kumar Jain Prop.

M/s. V.K. Metal Works and M/s. Balaji Resin Industries (supra),

which decisions have not been accepted by the department and

the appeals filed against these decisions before the Hon'ble

Supreme Court, are 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 learned counsel for the assessee, on the other hand,

has placed strong reliance on the impugned order.

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

Balaji All).oys' (supra), holds, inter alia, that excise duty refund 4 ITA No.541(Asr)/2014

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 Sh. Vinod

Kumar Jain Prop. M/s. V.K. Metal Works and M/s. Balaji Resin

Industries (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, Pathankot vs.

M/s. T.K. Paper Mills, Chack Sakta, Kathua, H.O.- Pathankot', in 5 ITA No.541(Asr)/2014

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

05.08.2014.

9. For the above discussion, the grounds taken by the

department are found to be shorn of merit, and are, 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 filed by the department is dismissed.

Order pronounced in the open court on 13th February, 2015.

Sd/- Sd/- (B.P. JAIN) (A.D.JAIN) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 13th February, 2015 /SKR/ Copy of the order forwarded to:

1. The Assessee:Sh.Vijay Kumar Sharma L/H Mrs. Veena Sharma , Hoshiarpur.

2. The ITO Ward-3, Hoshiarpur.

3. The CIT(A), Jalandhar.

4. The CIT, Jalandhar.

5. The SR DR, ITAT, Amritsar.

True copy By order

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