TMI Blog2022 (7) TMI 551X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Jurisdictional High Court in CIT Vs. Huges Communication India Ltd. [ 2013 (3) TMI 352 - DELHI HIGH COURT] - Thus we are of the opinion that provision for inventory obsolescence for the year under consideration is allowable deduction. Accordingly, we allow the Grounds of Appeal No. 1, 4 5 of the assessee. Nature of receipt - treating the excise duty subsidy as capital receipt - HELD THAT:- The said unit due to their presence in the notified area have availed the benefit in the form of excises duty subsidy - Therefore, the Ld. A.O and the CIT (A) should have allowed the claim of the assessee by treating the excise duty, subsidy as capital receipt. The similar issue has been arose for consideration in the case of Modern Papers [ 2021 (6) TMI 620 - ITAT DELHI] wherein by relying on the decision of the Co-ordinate Bench in the case of Crystal Coal Protection Pvt. Ltd. [ 2019 (12) TMI 980 - ITAT DELHI] allowed the claim of the assessee therein by treating the excise duties subsidy as capital receipt. Appeal of assessee allowed. - I.T.A. No. 3930/DEL/2018 - - - Dated:- 8-7-2022 - Shri B. R. R. Kumar, Accountant Member And Sh. Yogesh Kumar Us, Judicial Member For ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... I, the inventories are required to be valued at lower cost or not realizable value. Since the goods are already been expired which is not saleable, the value of the export goods was taken as NIL . Therefore, submitted that, the same should be treated as written off from the books of account. The Ld. Counsel for the assessee has also relied on the judgment of Hon'ble Supreme Court in CIT Vs. Woodward Governor India Pvt. Ltd. 312 ITR 254 (SC). 4. The Ld. Counsel for the assessee further submitted that, even the statutory auditors have certified the quantum of the assessee s provision for inventory obsolescence to conclude that the assessee has adopted scientific method for valuation. The Ld. AR has also relied on the judgment of Hon ble Apex Court in the case of Rotork Control India Pvt. Ltd. Vs. CIT (180 Taxman 422) and other judgments. 5. We have heard the parties and perused the material on record. The assessee has written off the obsolete inventory on expiry of the product. The copy of the statement showing the details of inventory obsolescence during the year under consideration are produced with paper book at Page No. 207 to 219. The Ld.CIT(A) confirmed the disallowa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated 19/12/2019 (ITA No. 1539/Del/2016), allowed the claim of the assessee therein by treating the excise duties subsidy as capital receipt. The relevant portions are hereunder:- 8. In this matter, there is no dispute on the amount of Excise Duty refund. Fact of assessee's unit being located in the notified area entitling the assessee to the benefits of Excise Duty Refund in accordance with Excise Notification Nos. 56 57/2002 issued by the Central Excise Department under the Industrial Policy of the Government of India, Ministry of Commerce and Industries, is also not in dispute at either of the stages before of authorities below or before us. The only dispute centers round the admissibility or otherwise of assessee's subsequent claim for treatment of Excise Duty Refund as capital in nature without filing any revised return. This issue is found squarely covered in favour of the assessee by the order of Co-ordinate Bench of This Tribunal in the case of M/s. Crystal Crop Protection (P) Ltd. vs. DCIT (supra), as rightly argued by the ld. Counsel for the assessee, where the identical claims of assessee for treating the Excise Duty Refund as capital receipt and deduction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt 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 would apply to appeals before ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ;s power to determine sum 'refundable' 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 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 Offi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o allow the 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 prono ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nism through which the subsidy is given is irrelevant; 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 Meghala ..... X X X X Extracts X X X X X X X X Extracts X X X X
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