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TMI Blog2012 (11) TMI 182X X X X Extracts X X X X X X X X Extracts X X X X ..... the office memorandum and statutory notifications issued in this behalf, to the appellants-assessees, cannot be construed as mere production and trade incentives, as held by the Tribunal. Excise Duty refund is to be treated as ‘capital receipt’ in the hands of the assessee and not liable to be taxed. - In the result, both the appeals of the Revenue are dismissed. - I.T.A. Nos. 81 & 82 (Asr)/2012 - - - Dated:- 2-7-2012 - SH. H.S. SIDHU AND SH. B.P.JAIN, JJ. Appellant by: Sh. R.L. Chhanalia, DR Respondent by: Sh. P.N.Arora, Adv. ORDER PER BENCH : These two appeals by the Revenue are directed against different orders of CIT(A), Jammu, each dated 22.012.2011 21.12.2001 for the assessment years 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and in law in not appreciating and applied the purpose test as laid down by the judgments of the Hon'ble Supreme Court. In the case of assessee, the money received by the assessee on account of refund of Central Excise was not supposed to be spent in a particular manner for purpose of substantial expansion of the industry. 5. The appellant craves to amend or add any one or more grounds of appeal. 2. Briefly stated, the grounds No. 1 to 5 revolve around the issue of Excise Duty refund which was claimed as exempt in view of Section 80IB of the Income-tax Act, 1961 (in short the Act ) being allowable to the assessee. The AO has not allowed the claim of the assessee and held that the receipts on account of Excise Duty refund ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (13)2000-NER dated June 14,2002 and Central Excise Notification Nos. 56 and 57, dated November 14, 2002 and other notification issued on the subject, pertaining to the industrial policy introduced in the State of Jammu and Kashmir, is a capital receipt and, thus, not liable to tax under the provisions of the Act, or revenue receipt, as opined by the authorities under the Act? (2) Whether the appellants-assessees are entitled to deduction under section 80IB of the Act on the excise duty refund and interest subsidy etc., being the income derived from the industrial undertaking, in case the excise refund and interest subsidy were found to be revenue receipt. 7. The Hon'ble High Court of Jammu and Kashmir while deciding the mat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... general manager of the concerned District Industries Centre to the jurisdictional Deputy Commissioner of Central Excise or the Assistant Commissioner of Central Excise, as the case may be, to the effect that the unit had created required additional regular employment, which would not, however, include employment provided by the industrial units to daily wagers or casual employees engaged in the units. 29. A close reading of the Office Memorandum and the amendment introduced thereto with paragraph No. 3 appearing in the Central Excise Notification Nos. 56 and 57 of November 11, 2002, thus, makes it amply clear that the acceleration of development of industries in the State was contemplated with the object of generation of employment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ind in industrial development, which is certainly a purpose in the public interest, the incentives provided by the office memorandum and statutory notifications issued in this behalf, to the appellants-assessees, cannot be construed as mere production and trade incentives, as held by the Tribunal. 33. Making of additional provision in the scheme that incentives would become available to the industrial units, entitled thereto, from the date of commencement of the commercial production, and that these were not required for creation of new assets cannot be viewed in isolation, to treat the incentives as production incentives, as held by the Tribunal, for the measure so taken, appears to have been intended to ensure that the incentives w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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