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TMI Blog2012 (12) TMI 726X X X X Extracts X X X X X X X X Extracts X X X X ..... has passed a well reasoned order based on facts and materials available on record, which requires no interference at our level - ground of the Revenue dismissed. Addition on account of late deposit of EPF u/s 36 and deduction u/s 80IB – Held that:- FAA has passed a well reasoned order based on facts and materials available on record, which requires no interference following the decision of the ITAT, Amritsar Bench, in the case of M/s. Sun Pharmaceuticals [] which is squarely applicable to the facts of the issue in hand, this ground of the revenue is dismissed - this ground of the Revenue is also dismissed. - I.T.A. No. 155, 160, 161, 163, 168 (Asr)/2012 - - - Dated:- 3-7-2012 - SH. H.S. SIDHU AND SH. B.P.JAIN, JJ. Appellant by:Sh. R.L. Chhanalia, DR ORDER PER BENCH ; These five appeals filed by the Revenue involving common issues were heard together and are being disposed off by this common order for the sake of convenience. 2. In all the appeals, grounds 1 to 4 are common, which read, as under:- 1 On the facts and circumstances whether the Ld. CIT(A) was right in allowing relief on account of deduction u/s 80IB on Central Excise Duty refund by re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fund granted in view of Government Notification was not eligible to be considered for the purpose of deduction u/s 80IB of the Act. 5. On appeal, the Ld. CIT(A) following the decision of the Hon'ble Jurisdictional High Court in the case of Shree Balaji Alloys v. CIT and Another (2011) 333 ITR 335 (J K) held that the Excise Duty refund is to be treated as capital receipt and not liable to be taxed. Now the Revenue is in appeal before this Tribunal against the order of the Ld. CIT(A). 6. We have heard Sh. R.L. Chhanalia, the Ld. DR, at length. We find that the issue is squarely covered in favour of the assessee and against the Revenue by the decision of the Hon'ble Jurisdictional High Court in the case of Shree Balaji Allows v. CIT and Another (2011) 333 ITR 335 (J K). The issues before the Hon'ble Jurisdictional High Court for determination were as under:- (1) Whether the amount of excise refund and interest subsidy received by the appellants-assessees, in pursuance of the incentives announced and sanctioned vide Government of India, Ministry of Commerce and Industry (Department of Industrial Policy and Promotion) s Office Memorandum No. 1(13)2000-NER dated June 14,2002 and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eated 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 in the State of Jammu and Kashmir and the generation of employment, so, contemplated, was not only casual or temporary; but was on the other hand, of permanent nature. 30 Considered thus, the paramount consideration of the Central Government in providing the incentives to the new industrial units and substantial expansion of the existing units, was the generation of employment through acceleration of industrial development, to deal with the social problem of unemployment in the State, additionally creating opportunities for self-employment, hence a purpose in public interest. 31 In this view of the matter, the incentives provided to the industrial units, in terms of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e that the excise duty refund, interest subsidy and insurance subsidy were production incentives, hence revenue receipt, cannot be sustained, being against the law laid down by the Hon'ble Supreme Court of India in Sahney Steel Case (1997) 228 ITR 253 and Ponni Sugars case (2008) 306 ITR 392. 36 The finding of the Tribunal that the incentives were revenue receipt is, accordingly, set aside holding the incentives to the capital receipt in the hands of the assesses. 37 In view of our above finding on the first issue, there is no need to opine on the second issue, which was raised in the alternative. 9. Respectfully following the judgment of the Hon'ble Jurisdictional High Court, we confirm the orders of the Ld. CIT(A) in holding that the Excise Duty refund is to be treated as capital receipt in the hands of the assessee and not liable to be taxed. 10. In ITA No.168(Asr)/2012, the Revenue has raised one more ground which is as under: Regarding addition on account of late deposit of PF and disallowance u/s 40(a)(ia) of the Income Tax Act, 1961. 1. On the facts and circumstances whether the ld. CIT(A) was right in allowing relief on account of deduction u/s 80IB on ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITAT, Amritsar Bench, in the case of M/s. Sun Pharmaceuticals ITA No.184(Asr)2009 for the assessment year 2005-06 dated 11.06.2010, which is squarely applicable to the facts of the issue in hand, we dismiss this ground of the revenue. 13. In ITA No.160(Asr)/2012, the Revenue has raised one more ground which is as under: Regarding addition on account of late deposit of PF and disallowance u/s 40(A(IA) of the Income Tax Act, 1961. 1. On the facts and circumstances whether the ld. CIT(A) was right in allowing relief on account of deduction u/s 80IB on addition made on account of late deposit of PF contribution and disallowance made u/s 40(a)(ia) as the assessee has contravened the provisions of the Income Tax Act, in view of the decision of the Jurisdictional Bench in the case of M/s. Kashmir Tubes reported in ITA No.145(Asr)/2005 dated 07.12.2007 where such disallowances were upheld by the Hon ble ITAT, Amritsar. 13.1. As regards disallowance made u/s 40(a)(ia) of the Income-tax Act, 1961, we are of the view that the issue in dispute is covered by the decision of Hon ble ITAT, Amritsar Bench in the case of M/s. Sun Pharmaceuticals, in ITA No.184(Asr)/2009 for the assessme ..... X X X X Extracts X X X X X X X X Extracts X X X X
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