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Issues involved: Appeal against CIT(A) order for assessment year 2008-09 regarding deduction u/s 80IB on Central Excise Duty refund and addition on account of disallowance of EPF.
Deduction u/s 80IB on Central Excise Duty refund: The Revenue challenged the CIT(A) order allowing relief on deduction u/s 80IB for Excise Duty refund, questioning the classification of the refund as a capital receipt. The Revenue argued against the reliance on High Court orders and the policy test used to determine the nature of the receipt. They also cited Supreme Court judgments and the Seaham Harbour Dock Company case to support their position. However, the ITAT upheld the CIT(A) decision, citing the precedent set by the Jurisdictional High Court of Jammu & Kashmir in the case of Shree Balaji Alloys, which deemed Excise Duty refund as a capital receipt not liable to be taxed. Consequently, the ITAT dismissed the Revenue's appeal on this issue. Addition on account of disallowance of EPF: Regarding the disallowance of EPF, the Revenue contended that the late deposit of EPF should not be eligible for deduction u/s 80IB. They referred to a previous decision by the Jurisdictional Bench in the case of M/s. Kashmir Tubes to support their stance. However, the ITAT ruled in favor of the assessee, citing a precedent set by the ITAT Amritsar Bench in the case of M/s. Sun Pharmaceuticals, where it was held that deduction u/s 80IB is allowable even on the amount of enhancement of income due to EPF disallowance. Consequently, the ITAT dismissed the Revenue's appeal on this issue as well. In conclusion, the ITAT dismissed the Revenue's appeal in ITA No.139(Asr)/2012, upholding the CIT(A) order for the assessment year 2008-09.
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