TMI Blog2011 (12) TMI 589X X X X Extracts X X X X X X X X Extracts X X X X ..... ircumstances whether the Ld. CIT(A) was right in allowing relief on account of deduction u/s 80IB on Central Excise Duty refund by 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 Lt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Act. 4. On appeal, the Ld. CIT(A) following the decision of the Hon'ble Jurisdictional High Court in the case of Shree Balaji Allows 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). 5. We have heard Sh. Tarsem Lal, the Ld. DR, at length. We find that the issue is squarely covered in favour of the assessee and against the Revenue by the decision of the Hon'ble Jurisdictional High Court in the case of Shree Balaji Allows v. CIT and Another (2011) 333 ITR 335 (J K). The issues before the Hon'ble Jurisdictional High Court for determination wer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... u 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. The Government s objective, as conveyed by the Hon ble Prime Minister a Srinagar on April 19, 2003, was, for creation of one lakh employment and self-employment op ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otification 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. 7. 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 Sahney Steel Case (1997) 228 ITR 253 and Ponni Sugars case (2008) 306 ITR 392. 36 The finding of the Tribunal that the incentives were revenue receipt is, accord ..... X X X X Extracts X X X X X X X X Extracts X X X X
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