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The ACIT, Circle - 5 (1) , Chandigarh Versus M/s Green Field Enterprises,

2016 (5) TMI 1368 - ITAT CHANDIGARH

Excise Duty refund received - whether the receipt constituted as capital receipt not liable to tax - Held that:- The issue is covered in favour of the assessee by order of ITAT Chandigarh Bench in the case of the same assessee for preceding assessment year 2009-10 in which the CIT(Appeals) deleted similar addition also confirmed by ITAT [2016 (5) TMI 929 - ITAT CHANDIGARH] as held the central excise duty refund does not appear to bear the character of income since what is refunded to the assesse .....

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r of the assessee. - Addition on account of rebate and discount relates to purchase of material which was shown on the credit side of the Profit & Loss Account - eligible for deduction under section 80IB - Held that:- CIT(Appeals) correctly found that impugned rebate and discount relates to purchase of material. The assessee has not deducted this amount from the purchases but has shown it separately on credit side of the Profit & Loss Account. Similarly, disallowance made under section 80IB .....

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, C.A. O R D E R PER BHAVNESH SAINI,JM This appeal by Revenue has been directed against the order of CIT(Appeals), Chandigarh dated 31.07.2013 for assessment year 2010-11. 2. We have heard ld. Representatives of both the parties and perused the material available on record. 3. Ground Nos. 1 and 4 of the departmental appeal are general and need no adjudication. 4. On ground No. 2, revenue challenged the order of the ld. CIT(Appeals) in holding that Excise Duty refund of ₹ 1,39,00,952/- rece .....

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ssessee submitted that deduction under section 80IB is allowable on Excise Duty received in view of the decision of ITAT Chandigarh Bench in the case of M/s Shivalik Agro Chemicals vide order dated 20.12.2011 in ITA 968/CHD/2010. 5(i) The ld. CIT(Appeals) noted that in preceding assessment year 2009-10 vide order dated 05.11.2012. Similar addition deleted by him by following decision of ITAT Chandigarh Bench in the case of M/s Shivalik Agro Chemicals (supra), accordingly, deleted the addition. 6 .....

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s is whether the excise duty refund can be treated as income derived from industrial activity for the purposes of allowing deduction under section 80IB of the Act. On perusal of the judgment of the Gauhati High Court in the case of Meghalaya Steels Ltd. (supra), we see that the same issue has been decided by the Hon'ble High Court in favour of the assessee in following terms : "17. Insofar as the second question is concerned, the central excise duty refund claimed by the assessee is on .....

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he notifications are fulfilled. In the present case, there is no dispute that the assessee was entitled to the central excise duty refund. 18. The Central Board of Excise and Customs in its Circular dt. 19th Dec., 2002 clarified that the refund is not on account of excess payment of excise duty but is basically designed to give effect to the exemption and to operationalise the exemption given by the notifications. In that sense, the central excise duty refund does not appear to bear the characte .....

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a direct nexus with the manufacturing activity and similarly, the refund of the central excise duty also has a direct nexus with the manufacturing activity. The issue of payment of central excise duty would not arise in the absence of any industrial activity. There is, therefore, an inextricable link between the manufacturing activity, the payment of central excise duty and its refund. In the circumstances, we are of the opinion that question No. 2 must be answered in the affirmative, in favour .....

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urse of hearing, stating that the issue of excise duty refund has been decided in favour of the assessee in this judgment arising out of the judgment of Gauhati High Court in the case of Meghalaya Steels Ltd. (supra). We observe that in this case before the Hon'ble Apex Court, the only issue decided was in respect of the allowability of transport subsidy, interest subsidy and power subsidy for the purposes of deduction under section 80IB of the Act and not that of excise duty refund. Though .....

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lar addition vide order dated 05.11.2012 and his order has been confirmed by the Tribunal vide order dated 06.04.2016. Therefore, following the order of the Tribunal in the case of same assessee for assessment year 2009-10, we dismiss this ground of appeal of the revenue. 8. On ground No. 3, revenue challenged the order of ld. CIT(Appeals) in holding that addition of ₹ 37,66,509/- on account of rebate and discount relates to purchase of material which was shown on the credit side of the Pr .....

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y the assessee was on material purchases which was shown separately without deducting the same from the bill. According to him, amount was deducted from the purchases and was shown separately on the credit side of the Profit & Loss Account and since credits relate to material purchases, therefore, assessee is entitled for deduction under section 80IB of the Act. It was submitted that the predecessor of ld. CIT(Appeals) has allowed deduction under section 80IB on similar nature of rebate and .....

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