9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2022 (9) TMI 1329 - HC - Income TaxBenefit of deduction u/s 80IC - whether the refund of excise duty obtained by the respondent/assessee could have been treated as profit from business and the assessee could have been granted the benefit of deduction under section 80IC ? - HELD THAT - We find that identical issue was decided in the case of Commissioner of Income-tax vs. Meghalaya Steels Ltd. 2010 (9) TMI 679 - GAUHATI HIGH COURT refund does amount to income in the hands of the assessee, it is a profit or gain directly derived by the assessee from its industrial activity. The payment of Central excise duty has a direct nexus with the manufacturing activity and similarly, the refund of the Central excise duty also has a direct nexus with the manufacturing activity. The issue of payment of Central excise duty would not arise in the absence of any industrial activity. There is, therefore, an inextricable link between the manufacturing activity, the payment of Central excise duty and its refund. In the circumstances, we are of the opinion that question must be answered in the affirmative in favour of the assessee - Also see SHREE BALAJI ALLOYS VERSUS COMMISSIONER OF INCOME-TAX 2011 (1) TMI 394 - JAMMU AND KASHMIR HIGH COURT - Decided in favour of assessee.
Issues Involved:
1. Whether the Tribunal was justified in deleting additions made by the Assessing Officer under Section 80-IC of the Income Tax Act on Government subsidy and Excise Duty refund. 2. Whether the order of the Income Tax Appellate Tribunal was perverse. Analysis: Issue 1: The main issue in this case is whether the excise duty refund obtained by the assessee could be considered as profit from business for the purpose of claiming deduction under section 80IC of the Income Tax Act. The High Court referred to the judgment of the Gauhati High Court in the case of Meghalaya Steel Limited, which held that the excise duty refund does not bear the character of income as it is essentially a refund designed to give effect to the exemption provided by the government. The court emphasized the direct nexus between the manufacturing activity, payment of excise duty, and its refund, concluding that the refund is a profit directly derived from the industrial activity. A similar view was also taken by the High Court of Jammu & Kashmir in a related case. The Supreme Court dismissed the appeal filed by the revenue in a separate case, confirming the view that excise duty refund is not to be treated as income. Therefore, based on precedents and legal interpretations, the High Court upheld the deletion of additions made by the Assessing Officer and dismissed the appeal filed by the revenue. Issue 2: The second issue raised in this case pertains to whether the order of the Income Tax Appellate Tribunal was perverse. The High Court did not find any perversity in the Tribunal's decision to delete the additions made by the Assessing Officer. The Tribunal's decision was based on legal principles and precedents established by various High Courts and the Supreme Court. Since the Tribunal's decision was in line with established legal interpretations and judgments, the High Court held that the order of the Tribunal was not perverse. Therefore, the High Court dismissed the appeal filed by the revenue on this ground as well. In conclusion, the High Court upheld the decision of the Tribunal to delete the additions made by the Assessing Officer under Section 80-IC of the Income Tax Act and found no perversity in the Tribunal's order. The court relied on legal precedents and interpretations to support its decision, ultimately dismissing the appeal filed by the revenue.
|
