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2013 (12) TMI 536 - AT - Income TaxDeduction under section 80IB - Excise Duty Refund and interest subsidy Held that - Following Shree Balaji Alloys v. CIT and Another 2011 (1) TMI 394 - Jammu and Kashmir High Court - The Excise Duty refund & Interest Subsidy are to be treated as capital receipts and are not liable to be taxed Decided against Revenue.
Issues:
Appeals against CIT(A) orders for assessment years 2003-04, 2004-05, and 2005-06 regarding deduction under section 80IB on Excise Duty Refund and Interest Subsidy. Analysis: The Revenue filed three appeals against separate orders of CIT(A), Amritsar, for different assessment years. The issues in all appeals were common, so they were heard together for convenience. The main grounds raised by the Revenue questioned the allowance of relief on Excise Duty Refund and Interest Subsidy under section 80IB by CIT(A), based on the judgment of the High Court of Jammu & Kashmir in a specific case. The Revenue argued that the receipts should be considered as trading receipts rather than capital receipts. They also contended that the judgments of the Supreme Court of India were not appropriately considered in determining the nature of the receipts. The parties agreed that the issues concerning Excise Duty Refund and Interest Subsidy were settled in favor of the assessee by the decision of the High Court of Jammu & Kashmir in a specific case. The High Court had ruled that these receipts are capital receipts and not taxable. After considering the arguments and the relevant material, the Tribunal noted that the issues in dispute had already been decided in favor of the assessee by the High Court's decision. The first appellate authority had also ruled in favor of the assessee based on the same High Court decision. Consequently, the Tribunal dismissed all three appeals of the Revenue, following the precedent set by the High Court. In conclusion, the Tribunal upheld the decisions of the first appellate authority and the High Court, determining that Excise Duty Refund and Interest Subsidy are to be treated as capital receipts and are not taxable. Therefore, all three appeals filed by the Revenue were dismissed based on the established legal precedent.
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