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Income Tax Appellate Tribunal, DELHI BENCHES : “E” NEW DELHI
Before: SHRI J.SUDHAKAR REDDY, AM & SMT.BEENA A PILLAI, JM
Assessee by : Sh. Suresh Anantharaman, FCA. Respondent by: Sh.Hari Kumar Sharma, Sr.D.R. O R D E R PER J.SUDHAKAR REDDY, ACCOUNTANT MEMBER All these appeals are heard together and disposed of by way of this consolidated order for the sake of convenience, as common issue is involved in all these appeals. Appeals for the A.Y. 2007-08, 2008-09 and 2009-10 1 are filed by the Revenue and appeals for the A.Y. 2006-07, 2009-10 and 2010-11 are filed by the assessee.
The assessee is a Partnership firm and is having an industrial undertaking in the State of Jammu & Kashmir. It is engaged in the manufacture of flexible packaging material mainly used in FFMCGindustries for packing finished goods. The assessee claims deduction u/s 80 IB of the Income Tax Act, 1961 (the Act). The issue before us is whether the excise duty refund received by the assessee in pursuance of the new industrial policy are capital in nature. 2.1. This is the second round of appellate proceedings before the ITAT. Earlier vide its order dt. 3rd January, 2014, the Tribunal had at para 15 held as follows. “15. It is also noted that for the A.Y. 2007-08 and 2008-09 the Ld.CIT(A) has allowed the additional ground of the assessee that the issue has to be decided in favour of the assessee in as much as the impugned amount is capital receipt. However, we find that we have already held hereinabove that the assessee is eligible for deduction u/s 80 IB of the Act on the impugned amounts and the decision of the Hon’ble Jurisdictional High Court in the case of Dharamchand Premchand (supra) is squarely applicable. Hence, we find that the adjudication on the issue as to whether the impugned amount is capital receipt or not is only of academic interest, hence, we are not dealing with the same.” 2.2. Subsequently this order was recalled pursuant to an M.A. filed by the assessee to consider the contention of the assessee that the excise duty refund is a capital receipt. Thus the matter is before us.
After hearing rival contentions we find that the Hon’ble Jammu & Kashmir High Court in the case of Shree Balajee Alloys and Others vs. CIT (2011) 239 CTR (J&K) 70, considered the very same issue and adjudicated as follows.
“Excise refund and interest subsidy received by the assessee in pursuance to the incentives and sanctioned vide Government of India Ministry of Commerce and Industries Office Memorandum dt. 14.6.2002 and Central Excise Notification Nos. 56 and 57 dt. 14th November, 2002 and other notifications issued on the subject pursuant to industrial policy for the state of Jammu & Kashmir as capital receipt.” 3.1. The Hon’ble Supreme Court upheld this decision in Civil Appeal no.10061 of 2011 and other appeals CIT, J&K vs. Shree Balajee Alloys and Others vs. CIT vide order dt. 19.4.2016. In fact the Assessing Officer had at page 15 para 16 of his order for the A.Y. 2009-10 has referred to the same Central Excise Notification no.56 & 57 dt. 14th November, 2002. 3.2. The Ld.D.R. could not controvert the submission of the assessee that the notification of the Ministry of Commerce, Govt. of India and the Industrial Policy introduced in the State of J&K considered that the Hon’ble High Court and that which is applicable to the assessee company are the same. Under these circumstances we respectfully follow the judgement of Hon’ble Supreme Court which held that the refund of excise duty/VAT received by the assessee pursuant to the policy of Govt. of India for promotion of industrial policy.
In the result the appeals of the assessee for the A.Y. 2006-07, 2009- 10 and 2010-11 are allowed. Revenue appeals for the A.Y. 2007-08, 2008- 09 and 2009-10 are dismissed.
Order pronounced in the Open Court on 24th January, 2017.