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2017 (6) TMI 828 - ITAT CHANDIGARH

2017 (6) TMI 828 - ITAT CHANDIGARH - TMI - Excise duty refund - revenue or capital income - eligibility for deduction u/s 80IB - Held that:- Excise duty Refund was capital in nature since it was granted to achieve the purpose of acceleration of industrial development in the State and generation of employment which were public purposes and thus could not be construed as operational incentives. Thus it is settled that subsidy received by way of refund of excise duty for setting up new industrial u .....

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essment year 2010-11 wherein the I.T.A.T. had held that the assessee was entitled to deduction on the same. No change in facts have been brought to our notice by the learned D.R. from the assessment year 2010-11. In view of the same we see no reason to interfere in the order of the learned CIT (Appeals) who has allowed the assessee’s appeal. - Addition on account of interest received on FDRs by denying deduction u/s 80IB on the same- Held that:- CIT (Appeals) after giving a categorical findi .....

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ndings of the Ld.CIT(Appeals) to mean that the entire issue has been restored to the Assessing Officer to decide as per law, since the Ld.CIT(Appeals) has no powers to set aside a case to the AO, as per the provisions of section 251(1) of the Act, which deal with powers of the CIT(A)’s. But, we may add in the same breath, that it cannot be denied that the balance interest income of ₹ 77,249/- has not been dealt with by the Ld. CIT(Appeals). We therefore restore the issue of allowance of de .....

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essment year 2012-13. 2. The grounds raised by revenue are as under: 1. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in allowing appeal of the assessee without appreciating the facts of the case. 2. On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in holding that the excise duty refund of ₹ 1,65,02,244/- received by the assessee constituted a capital receipt not liable to tax under the provisions of Income Tax Act, 19 .....

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which was shown on the credit side of the profit & Loss account and the assessee is liable for deduction u/s 80IB. 5. It is prayed that the order of the Ld. CIT(A) be set aside and that of the Assessing Officer may be restored. 6. The appellant craves leave to add or amend any grounds of appeal before the appeal is heard or disposed off. 3. Ground Nos.1, 5 and 6 being general in nature need no adjudication and are, therefore, not being dealt with by us. 4. Ground No.2 raised by the Revenue i .....

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n excise duty refund. The Assessing Officer disallowed the claim, holding that it cannot be said to be derived from the business of the assessee, which is a prerequisite for claiming the said deduction, since its source was not from the industrial undertaking of the assessee but the scheme of the Central Government. 6. The matter was carried in appeal before the Ld.CIT(Appeals), where the assessee argued that the Hon'ble Jammu & Kashmir High Court in the case of M/s Shree Balaji Alloys & .....

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efund of the excise duty as capital in nature. The Ld.CIT(Appeals) after considering the assessee s submissions deleted the addition made by following the order of the I.T.A.T. in assessee s own case for assessment year 2010-11 vide its order in ITA No.971/Chd/2013 dated 2.5.2016. 7. Aggrieved by the same, the Revenue has now come up in appeal before us. While the Ld. DR relied upon the order of the Assessing Officer and stated that the excise duty refund receipt was revenue in nature and having .....

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uty refund whether capital or revenue and its deductibility u/s 80IB, we find that the same has attained finality in view of the decision of the Hon'ble Apex Court in the case of M/s Shree Balaji Alloys & Others (supra) and in the case of CIT Vs. Meghalaya Steels 383 ITR 217 (SC). The Hon'ble Apex Court in the case of M/s Shree Balaji Alloys & Others (supra) dismissed the appeal of the Revenue against the order of the Hon'ble Jammu & Kashmir High Court following its decis .....

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is a capital receipt and not taxable as income. 10. In view of the same, we find no reason to interfere in the order of the Ld.CIT(Appeals) deleting the addition made on account of excise duty refund amounting to ₹ 1,65,02,244/-. Ground No.2 raised by the Revenue is, therefore, dismissed in the above terms. 11. Ground No.3 raised by the Revenue is against the action of the Ld.CIT(Appeals) in deleting the addition of ₹ 11,22,561/- made on account of rebate and discount relating to pu .....

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ty of the assessee and thus the assessee was not entitled to claim deduction u/s 80IB of the Act on account of the same. 13. Before the Ld.CIT(Appeals), the assessee contended that rebate and discount has been received by the assessee on purchases made by it in its unit set up in Jammu & Kashmir, which was eligible to claim deduction of its profits u/s 80IB, and the assessee had instead of deducting this amount from purchases had shown the same separately on the credit side of the Profit &am .....

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. The learned CIT (Appeals) after considering the assessee s submissions deleted the disallowance made relying upon the decision of the I.T.A.T. in assessee s own assessee for assessment year 2010-11. 14. Before us, the learned D.R. relied upon the order of the Assessing Officer, while the Ld. counsel for the assessee relied upon the order of the learned CIT (Appeals). 15. Having heard both the parties, we find no merit in the ground raised by the Revenue. Undisputedly, identical issue of allowa .....

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f the assessee, we see no reason to interfere in the order of the learned CIT (Appeals) who has allowed the assessee s appeal by following the decision of the I.T.A.T. in assessee s own case in assessment year 2010-11. In view of the same ground No.3 raised by the Revenue is dismissed. 16. Ground No.4 raised by the Revenue is against the action of the learned CIT (Appeals) in deleting the addition made by the Assessing Officer of ₹ 77,249/- on account of interest received on FDRs by denyin .....

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nd made addition of ₹ 2,20,834/-. 18. Before the learned CIT (Appeals), the assessee contended that out of the total interest credited to the Profit and Loss Account of ₹ 2,20,834/-, ₹ 68,220/- was interest received on FDRs and ₹ 1,52,614/- was interest received from other sources. The assessee submitted that no deduction u/s 80IB had been claimed on ₹ 1,43,585/-. The learned CIT (Appeals) after considering assessee s submissions and after perusing the computation o .....

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duction on the interest of ₹ 77,249/- but had in fact directed the Assessing Officer to allow deduction on the same under section 80IB of the Act as per law after due verification. The Ld. counsel for the assessee drew our attention to the order of the learned CIT (Appeals) giving the aforesaid directions at para 8.3. 21. We have heard the rival contentions. We are not in agreement with the contention raised by the Ld.DR. On perusal of the order of the learned CIT (Appeals) we find that th .....

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