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TMI Blog2012 (11) TMI 182X X X X Extracts X X X X X X X X Extracts X X X X ..... relying upon orders of Hon'ble High Court if J&K, Jammu which has been delivered not on merits of the issue but holding the receipt to be a capital receipt only because the policy under which the same was paid envisaged tackling the unemployment in the State which cannot be said to be a good test for deciding whether a receipt is a trading receipt or a capital receipt. 2. On the facts and circumstances whether the Ld. CIT(A) was right in facts and circumstances and in law in not appreciating the judgments of Hon'ble Supreme Court of India in the case of Ponni Sugar & Sawhney Steel and press works Ltd, wherein the Hon'ble Supreme Court had held such receipts to be the revenue receipts in as much as in that case payments were mad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lloys v. CIT and Another (2011) 333 ITR 335 (J&K) held that the Excise Duty refund is to be treated as 'capital receipt' and not liable to be taxed. Now the Revenue is in appeal before this Tribunal against the order of the Ld. CIT(A). 4. The Ld. DR, relied upon the order of the Assessing Officer. 5. The Ld. counsel for the assessee, Sh. P.N. Arora, on the other hand, relied on the decision of the Jurisdictional High Court of J & K in the case of Shree Balaji Allows v. CIT and Another (2011) 333 ITR 335. 6. After hearing both the parties and perusing the material available on record, we find that the issue in dispute is squarely covered in favour of the assessee and against the Revenue by the decision of the Hon'ble Jurisdictional Hi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... C) and observed as under:- "26. A perusal of the Office Memorandum dated June 14, 2002 indicating new industrial policy and other concessions for the State of Jammu and Kashmir, makes it explicit that the concessions were issued to achieve twin objects viz. (i) acceleration of industrial development in the State of Jammu and Kashmir, which had been found lagging behind in such development, and (ii) generation of employment in the State of Jammu & Kashmir. 27. Amendment introduced to the Office Memorandum vide notification of November 28, 2003 of the Government of India, Ministry of Commerce and Industry (Department of Industrial Policy and Promotion) eloquently demonstrates the Central Goverenment's intention in extending the incentives. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bstantial expansion of the existing units, was the generation of employment through acceleration of industrial development, to deal with the social problem of unemployment in the State, additionally creating opportunities for self-employment, hence a purpose in public interest. 31 In this view of the matter, the incentives provided to the industrial units, in terms of the new industrial policy, for accelerated industrial development in the State, for creation of such industrial atmosphere and environment, which would provide additional permanent source of employment to the unemployed in he State of Jammu and Kashmir, were in fact, in the nature of creation of new assets of industrial atmosphere and environment, having the potential of empl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to determining the character of the incentive subsidies, when it is found, as demonstrated in the Office Memorandum, amendment introduced thereto and the statutory notification too that the incentives were provided with the object of creating avenues for perpetual employment, to eradicate the social problem of unemployment in the State by accelerated industrial development. 8. The Hon'ble Jurisdictional High Court concluded as under:- "35 For all what has been said above, the finding of the Tribunal on the first issue that the excise duty refund, interest subsidy and insurance subsidy were production incentives, hence revenue receipt, cannot be sustained, being against the law laid down by the Hon'ble Supreme Court of India in S ..... X X X X Extracts X X X X X X X X Extracts X X X X
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