TMI Blog2019 (12) TMI 980X X X X Extracts X X X X X X X X Extracts X X X X ..... ITAT DELHI ] wherein the appeal of the assessee is allowed. The same is squarely applicable to the facts of the instant case. Further, the matter stands squarely covered by the order of the Hon ble Jammu Kashmir High Court in the case of Shri Balaji Alloys Vs CIT [ 2011 (1) TMI 394 - JAMMU AND KASHMIR HIGH COURT ] - Appeal of the assessee on the ground of Excise Duty subsidy and interest subsidy as capital receipt is hereby allowed. Claim of education cess as an allowable expenditure - Allowable deduction u/s 37 - HELD THAT:- The similar issue of allowability of cess u/s 37 has been examined in ITC LTD. [ 2019 (4) TMI 1574 - ITAT KOLKATA ] wherein the amount of the cess paid has been held to be an allowable deduction. We find that in the case of Chambal Fertilizers and Chemicals Ltd. [ 2018 (10) TMI 589 - RAJASTHAN HIGH COURT ] held that in view of the Circular of CBDT where the word cess is deleted, the claim of the assessee for deduction is acceptable. In that case, the Hon ble High Court held that there is difference between the cess and tax and cess cannot be equated with the cess. Hence, keeping in view the provisions of the Act, Circular of the CBDT and ju ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 with Rules 8D of the I.T. Rules, 1962. However, the Assessing Officer after recording reasons and following CBDT Circular No. 5/2014 dated 11.02.2014 disallowed ₹ 2,50,000/-u/s 14A of the Act read with Rules 8D(2)(iii). 4. During the arguments before us, the ld. AR submitted that the company has not earned any exempt income and hence the disallowance made by the assessee following the CBDT Circular No. 5/2014 dated 11.02.2014 is legally not valid. The ld. DR relied on the orders of the authorities below. The revenue has not disputed the factual position. Hence, keeping in view the judgment of Hon ble Delhi High Court in the case Cheminvest Ltd. Vs CIT in ITA No. 749/2014 dated 02.09.2015, judgment of Hon ble Supreme Court in the case of Chit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 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 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 wou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Modern Homecare Products Ltd. in ITA No. 2595/Del/2002 holding that it is not the appropriate forum to raise the issue at this juncture. 8. Heard the arguments of both the parties and perused the material available on record. 9. In the case of Jute Corporation of India Ltd. Vs CIT vide order dated 04.09.1990, 1991 AIR 241 held that the Hon ble Apex Court while adjudicating on the issue of additional ground held that the declaration of law is clear that the power of the Appellate Assistant Commissioner is coterminus with that of the Income Tax Officer. If that be so, there appears to be no reason as to why ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g 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. 12. While dealing with the case of NTPC, the Hon ble Apex Court enunciated that it would not be proper if the Tribunal is confined only to issues arising out of the appeal before the Commissioner of Income-tax (Appeals) and it amounts to taking too narrow a view of the powers of the Appellate Tribunal. Undoubtedly, the Tribunal will have the discretion to allow or not allow a new ground to be raised. But where the Tribunal is only required to consider a question of law arising from the facts which are on record in the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an 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 Officer may require on specified points, and after taking into account all relevant material which he has gathered, the Assessing Officer shall, by an order in writing, make an assessment of the total income or loss of the assessee, and determine the sum payable by him or refund of any amount due to him on the basis of such assessment. 17. The CBDT Circular No. 772 dtd. 23.12.1998-- explaining the above substituted provision of Section 143( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ard 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 ble Apex Court on the issue of allowability of the claim, we hereby hold that the assessee is eligible to raise the issue at appellate levels. 22. Having said so, the issue whether the Excise Duty subsidy and interest subsidy can be treated as capital receipt is examined. The similar subsidy has been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duction 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 (SC)). Therefore, for the aforesaid reasons given above, the revenue's ground of appeal is dismissed. 24. The appeal of the assessee on the ground of Excise Duty ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
