9911796707
TMI Blog2019 (12) TMI 980X X X X Extracts X X X X X X X X Extracts X X X X ..... ve version of the Learned Assessing Officer with respect to the disallowance under section 14A of the Income Tax Act, 1961 ("Act"). 3. That the subsidy received by the appellant under the 'New Industrial Policy and Other Concessions Scheme' from the state of Jammu & Kashmir is to treated as "Capital Receipt" in view of the decision of the Hon'ble Jammu & Kashmir High Court in Shree Balaji Alloys V CIT (239 CTR 70), though wrongly treated as "revenue receipt" in the return of income." 3. Ground Nos. 1 & 2 are inter-related. The assessee company is engaged in the business if manufacturing of pesticides, insecticides, herbicides and fertilizers. The Assessing Officer observed that during the year under consideration, the assessee company had made an investment of Rs. 10,00,00,000/- in SBI Mutual Funds, the income from which is exempt in the form of dividend but the assessee did not make any disallowance u/s 14A of the Income Tax Act, 1961. The assessee submitted before the Assessing Officer that the investments in SBI Mutual Fund were made out of own surplus funds and no funds were borrowed for this purpose. Thus, no expenses were liable to be disallowed u/s 14A of the Act read wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee should be prevented from raising that question before the tribunal for the first time, so long as the relevant facts are on record in respect of that item. We do not see any reason to restrict the power of the Tribunal under Section 254 only to decide the grounds which arise from the order of the Commissioner of Income-tax (Appeals). Both the assessee as well as the Department have a right to file an appeal/cross-objections before the Tribunal. We fail to see why the Tribunal should be prevented from considering questions of law arising in assessment proceedings although not raised earlier. 6. In the case of Jute Corporation of India Ltd. v. C.I.T. . this Court, while dealing with the powers of the Appellate Assistant Commissioner observed that an appellate authority has all the powers which the original authority may have in deciding the question before it subject to the restrictions or limitations, if any, prescribed by the statutory provisions. In the absence of any statutory provision, the appellate authority is vested with all the plenary powers which the subordinate authority may have in the matter. There is no good reason to justify curtailment of the power of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ering the purpose test and spirit, Hon'ble High Court of Jammu & Kashmir in the case of Shree Balaji Alloys Vs CIT (2011) 333 ITR 335 (J&K) held that Excise Duty subsidy, Interest Subsidy and insurance subsidy received with the object of creating avenues for perpetual employment, to eradicate the social problem of unemployment in the state by accelerated industrial development is capital receipt. It was also submitted that the Civil Appeal No. 10061 of 2011 dated 19.04.2016 filed by department has been dismissed by the Hon'ble Apex Court. It was reiterated that the facts of Shree Balaji Alloys is akin to the facts of the instant case. 7. The ld. AR also argued placing reliance is also placed on the decision of Co-ordinate Bench of ITAT in the case of Montage Enterprises Pvt. Ltd. in ITA No. 5124/Del/2011 dated 29.06.2018 wherein it was held that Excise Duty subsidy to be treated as capital in nature stands upheld from the stage of the Hon'ble Supreme Court. Once receipt itself has been treated as capital in nature it cannot be bought to tax, then same cannot be held to be includable in the book profit. The ld. DR relied on the judgment of Co-ordinate Bench of Delhi in the case of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that an appellate authority has all the powers which the original authority may have in deciding the question before it subject to the restrictions or limitations, if any, prescribed by the statutory provisions. In the absence of any statutory provision, the appellate authority is vested with all the plenary powers which the subordinate authority may have in the matter. There is no good reason to justify curtailment of the power of the Appellate Assistant Commissioner in entertaining an additional ground raised by the assessee in seeking modification of the order of assessment passed by the Income-tax Officer. This Court further observed that there may be several factors justifying the raising of a new plea in an appeal and each case has to be considered on its own facts. The Appellate Assistant Commissioner must be satisfied that the ground raised was bona fide and that the same could not have been raised earlier for good reasons. The Appellate Assistant Commissioner should exercise his discretion in permitting or not permitting the assessee to raise an additional ground in accordance with law and reason. The same observations would apply to appeals before the Tribunal also." 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 39; to the assessee on completion of assessment under sub-section (3) of Section 143 of the Act. The intention of the Legislature in introducing amended Section 143(3) was explained by the CBDT in Circular No. 549 dated 31.10.1989 wherein the Board stated that under the amended provisions, the ITA No.679/Kol/2016 Smt. Sharmila Kumar, AY- 2011-12 Assessing Officer in an assessment order passed under section 143(3) cannot assess income at a figure lower than the returned income, nor can loss be assessed at a figure higher than the returned, and therefore no tax paid with reference to the returned income can now be refunded to the assessee on completion of regular assessment. 16. Year 1998 -- The above provision was later on substituted by the Finance (No.2) Act of 1998 and the power to determine 'sum refundable' to the assessee by the Assessing Officers in the proceedings u/s 143(3) was re-instated by the Legislature. The relevant provision, as it stands now reads as under: "(3) On the day specified in the notice issued under sub-section (2), or as soon afterwards as may be, after hearing such evidence as the assessee may produce and such other evidence as the Assessing Of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... claim for relief. 20. Further, the CBDT Circular No. 14(XL-35 dated 11.04.1955) wherein it is held as under: "3. Officers of the Department must not take advantage of ignorance of an assessee as to his rights. It is one of their duties to assist a taxpayer in every reasonable way, particularly in the matter of claiming and securing reliefs and in this regard the Officers should take the initiative in guiding a tax payer where proceedings or other particulars before them indicate that some refund or relief is due to him. This attitude would, in the long run, benefit the ITA No.679/Kol/2016 Smt. Sharmila Kumar, AY- 2011-12 department for it would inspire confidence in him that he may be sure of getting a square deal from the department. Although, therefore, the responsibility for claiming refunds and reliefs rests with assessees on whom it is imposed by law, officers should" 21. Further, we also note that the relief sought cannot be refused merely because the assessee has omitted to claim the relief as held by the Hon'ble Supreme Court in Anchor Pressings P. ltd. Vs. CIT 161 ITR 159. Hence, keeping in view the entire facts on record, the judicial pronouncements of the Hon' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relevant; ii) On facts, the object of the subsidy scheme was (a) to accelerate industrial development in J&K and (b) generate employment in J&K. Such incentives, designed to achieve a public purpose, cannot, by any stretch of reasoning, be construed as production or operational incentives for the benefit of assesses alone. It cannot be construed as mere production and trade Incentives; (iii) The fact that the incentives were available only after commencement of commercial production cannot be viewed in isolation. The other factors which weighed with the Tribunal are also not decisive to determine the character of the incentive subsidies in view of the stated objects of the subsidy scheme; (iv) Question whether the subsidy receipts are eligible u/s 80- IB not decided." 23. On appeal by the department to the Supreme Court held dismissing the appeal: "The issue raised in these appeals is covered against the Revenue by the decision of this Court in "Commissioner of Income Tax, Madras Vs. Ponni Sugars and Chemicals Ltd.", reported in (2008) 9 SCC 337, or in the alternate, in "Commissioner of Income Tax Vs. M/s Meghalaya Steels Ltd.", reported in (2016) 3 SCALE 192 (383 ITR 217 ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
