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TMI Blog2016 (5) TMI 961X X X X Extracts X X X X X X X X Extracts X X X X ..... , the difference would not become unexplained cash credit which can be added u/s. 68 of the Act. The ld. CIT(A) has rightly deleted the impugned addition, we do not find any error or infirmity in the findings of the ld. CIT(A). Excise Duty refund - capital or revenue receipt - Held that:- As we find that in earlier years, the Excise Duty refund has been treated as a capital receipt which has been confirmed by the Hon’ble High Court of J & K which has been followed by the First Appellate Authority; therefore, no interference is called for. - ITA. No: 998 & 1050/AHD/2012 - - - Dated:- 13-4-2016 - SHRI RAJPAL YADAV, JUDICIAL MEMBER SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER For The Appellant : Shri Ramesh Malpani, AR For The Respo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 4. The Ld.CIT(A) has erred in law and on facts in deleting the addition made of ₹ 3,48,77,602/- made by invoking provisions of Section 80IB(13) r.w.s.80IA(8) 80IA(10) of the Act even though the Assessing Officer had categorically analyzed in the body of assessment order that that the benefits of Section 80IA could be availed only of natural profits and not for unnatural, artificial or exaggerated profits. 5. The Ld.CIT(A) has erred in law and on facts in allowing the deduction u/s.80IB(4) on excise duty refund of ₹ 4,44,289/- even though excise duty refund does not constitute to be a part of manufacturing activity of the business. 6. The Ld.CIT(A) has erred in law and on facts in admitting the additional ev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A.O further found that the assessee has shown net profit at ₹ 3,48,77,602/- by taking the value of closing stock at ₹ 11,66,58,592/-. The A.O was of the opinion that if the closing stock value is taken at ₹ 6,08,36,126/- as computed by him, the assessee would incur a loss of ₹ 2,09,44,864/-. The A.O observed that since assessee s books of account do not reflect the true picture, therefore, the books are rejected. The A.O further invoked the provisions of Section 80IA(13) read with section 80IA(10) and observed that the assessee has arranged its business in such a way that the profit is more than the ordinary profit. 8. The A.O treated the loss of ₹ 2,09,44,864/- as the net loss from manufacturing activity a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee is correct and is as per well recognized method. It was further brought to the notice of the ld. CIT(A) that if the valuation of closing stock is altered then the net profit of the assessee is also altered which means that the entire exercise of computing the total income has to be done afresh on the basis of altered figures. In so far as the claim of deduction u/s. 80IB(4) is concerned, it was vehemently submitted that the assessee has fulfilled all the mandatory conditions including employing of 10 or more workers. The assessee further strongly agitated the addition made u/s. 68 being the difference in the profit shown by the assessee and the loss computed by the A.O. After giving a thoughtful consideration, the ld. CIT(A) re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oncerned, the ld. CIT(A) followed the order of the Tribunal Amritsar Bench in assessee s own case wherein the Tribunal has followed the judgment of Hon ble J K High Court in case of M/s. Balaji Alloyas 333 ITR 335 and directed the A.O to treat the same as capital receipt. 16. Aggrieved by this order of the ld. CIT(A) revenue and the assessee are in appeal before us. 17. At the very outset, the ld. counsel fairly conceded that if the valuation of closing stock made by the ld. CIT(A) is accepted, there is a net loss as computed by the ld. CIT(A) and, therefore, the claim of deduction u/s. 80IB(4) would be only of academic interest. The ld. D.R. strongly relied upon the findings of the A.O. 18. We have given a thoughtful considerati ..... X X X X Extracts X X X X X X X X Extracts X X X X
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