TMI Blog2012 (12) TMI 374X X X X Extracts X X X X X X X X Extracts X X X X ..... A No. 65(Asr)/2010 1. The Hon'ble President of the Tribunal has referred the following questions for consideration of the Special Bench vide order dated 26.04.2010. (i) Whether in the facts and circumstances of the case, the excise duty refund set off is a capital receipt or revenue receipt. (ii) If the excise duty refund/set off is held to be revenue receipt, whether the said amount is to be included in the business profits for the purpose of deduction u/s 80IB of the Income Tax Act. 2. The Ld. counsel of the assessee, Sh. Salil Kapoor, filed a chart and pointed out that originally in assessment year 2005-06, the assessee had claimed deduction under section 80IB of the Income-tax Act, 1961 (In short, 'the Act') on the refund of excise duty, which was not allowed by the A.O. By the time, the matter travelled to the Tribunal an additional ground was raised stating that refund of excise duty should be treated as capital receipt. Though the additional ground was admitted but the whole matter was decided against the assessee and the matter travelled before the Hon'ble Jammu Kashmir High Court and the same was decided in favour of the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nal ground was taken before the ld. CIT(A) that receipt of excise duty refund should be considered as capital receipt.. The Ld. CIT(A), after considering the additional ground decided this issue against the assessee by following the decision of the ITAT, Amritsar Bench, Amritsar, in the case of Shree Balaji Alloys v. ITO [IT Appeal No.255 (Asr) of 2009, dated 26-11-2009] and in the case of Ravenbhel Healthcare (P.) Ltd. v. ITO, Ward 1(2), Jammu, [ITA No. 305(Asr)/2009, dated 26.11.2009] by observing that the Tribunal has considered all the aspects of the issue. It is observed that assesse's unit is located in Jammu and assessee is also being assessed to tax in Jammu, therefore, the decision of Hon'ble J K High Court in the case of Shree Balaji Alloys (supra) (where even assessee was also one of the party) has to be treated as decision of Jurisdictional High Court, which is binding on us. No doubt, the Hon'ble Supreme Court, has admitted the SLP against this decision vide order dated 18.11.2011, but no stay has been granted against the operation of the order of J K High Court. Therefore, in our considered opinion, the decision of the Hon'ble J K High Court in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , so, contemplated, was not only casual or temporary; but was on the other hand, of permanent nature. 30. Considered thus, the paramount consideration of the Central Government in providing the incentives to the new industrial units and substantial 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 employment generation to achieve a social object. Such incentives, designed to achieve public purpose, cannot, by any stretch of reasoning, be construed as production or operational incentives for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion, which is binding in nature on this Special Bench, as observed earlier, we hold that refund of excise duty is to be treated as capital receipt in the hands of the assessee. Accordingly, the first question is decided in favaour of the assessee. 7.In respect of second question, it was observed by the Hon'ble J K High Court at para 37, as under: 37. In view of our above finding on the first issue, there is no need to opine on the second issue, which was raised in the alternative. 8. Therefore, in view of the above observations and the fact that once refund of excise duty is held to be of capital nature then there is no need to decide the second question. 9. During hearing it was further observed that in this appeal basically dispute was in respect of nature of excise duty refund, which has been referred to the Special Bench by the Hon'ble President of the Income Tax Appellate Tribunal. But there is another issue which has also been raised vide ground No.6, which reads as under: 6. That the charging of interest u/s 234-B at ₹ 2,21,75,951/- is arbitrary, unjust illegal on various factual legal grounds. 10. The issue raised in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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