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2022 (9) TMI 653 - Income Tax
Nature of receipt - excise duty and interest subsidy - Revenue or capital receipt - HELD THAT:- The decision of the ld. Commissioner on the issue in hand is not only based on the peculiar facts and circumstances but also upon the judgment of Shree Balaji Alloys&Ors. [2011 (1) TMI 394 - JAMMU AND KASHMIR HIGH COURT] wherein while considering the Central Excise Notifications No. 56/57 of 11.11.2002 which arepari-materiato the notifications No. 56/57 dated 14.11.2012 issued by the Central Excise Department as involved in the instant case, on the basis of which the Assessee had claimed deduction u/s. 80IB for its unit at Samba and Udhampur ( Jammu & Kashmir), has clearly held “that excise duty refund and interest subsidy were production incentives and ‘capital receipts’ in the hands of the Assessee.”
The said judgement of the Hon’ble High Court has also been scrutinized and approved by the Hon’ble Apex Court in Shri Balaji Alloys [2016 (4) TMI 1161 - SC ORDER] wherein dismissed the appeal filed by the Revenue by holding “that the issue raised in these appeals is covered against the Revenue.”
Assessing Officer in the subsequent cases for the A.Y. 2014-15 and 2015-16, has allowed the excise duty refund and interest subsidy as ‘capital receipts’.
Addition made under MAT provisions - Once the foundation lost its existence, then the building would automatically collapse. In simple meaning, once it is determined that receipt is not in the nature of income, then it cannot be considered in the book profit for the purpose of computation u/s. 115JB of the Act. As the addition in the instant case could not survive under normal provision of the Act, thus the addition under MAT provisions also will not survive, hence stands deleted. Consequently, decision of the ld. Commissioner on this issue is set aside and the appeal of the Assessee is allowed.