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TMI Blog2021 (9) TMI 233X X X X Extracts X X X X X X X X Extracts X X X X ..... an be rectified u/ s 154 of the Act. Hon ble Supreme Court in the case ACIT vs. Saurashtra Kutch Stock Exchange Ltd. [ 2008 (9) TMI 11 - SUPREME COURT] held that non consideration of a decision of Jurisdictional High court or Supreme court can be said to be a 'mistake apparent from record' which can be rectified under section 254(2). After considering the above circular and judicial pronouncements, we hold that the petition submitted by the assessee falls within the scope of section 154. Whether Excise Duty refund is capital or revenue receipt ? - Hon' ble High Court of J K in the case of Shree Balaji Alloys [ 2011 (1) TMI 394 - JAMMU AND KASHMIR HIGH COURT] held that Excise duty refund, Interest subsidy and Insurance subsidy received with the object of creating avenues for perpetual employment, to eradicate the social problem of unemployment in the state by accelerated industrial development is capital receipt - we find no dispute that the Excise Duty refund received by the assessee is to be treated as capital receipt. Exclusion of capital receipts in computing Book profit u/ s 115JB - HELD THAT:- Only that receipt which forms part of the income are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me under the normal provision of the Act as well as in computing book profit u/s 115JB. 2.2 That on the facts and in the circumstances of the case, the Ld. CIT(A) was not justified and grossly erred in non-considering the claim of excise duty subsidy as capital receipt as the issue is squarely covered by the decision of Hon'ble Apex Court wherein on the same scheme and same factual scenario, it was held that the excise duty subsidy is capital receipt. 2.3 That on the facts and in the circumstances of the case, the Ld. CIT(A) was not justified and grossly erred in non-considering the Circular No. 68 dated 17- 11-1971 wherein the issue raised in the appeal has been squarely covered 3.0 That on the facts and in the circumstances of the case, the Ld' CIT(A) was not justified and grossly erred in non- considering the claim of Focus Product Scheme/ Focus Market Scheme as capital receipt in computing the total income under the normal provision of the Act as well as in computing the book profit u/ sll5 JB. 4.0 That on the facts and circumstances of the case, the Ld. CIT(A) was not justified and grossly erred by not following the High Court decision for a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tries in the state of Himachal Pradesh Jammu and Kashmir. Whether issue falls u/ s 154 or not? 10. The assessment u/ s 143(3) was completed on 29.01.2014 wherein the said subsidy was claimed as revenue receipt. However, later on in 2016 when the SC in identical Scheme has announced the said subsidy as capital receipt, the assessee filed application u/s 154 to treat the said subsidy as capital receipt not chargeable to tax. 11. Now a question arises as to what constitute mistake apparent from record, whether, a Supreme court judgment delivered at later point of time after passing or order can constitute mistake apparent from record or not, whether income tax authority can amend any order, if there is any mistake apparent from record with relevance to a later judgment. 12. We find that CBDT Circular No. 68 dated 17.11.1971 wherein the issue raised in the appeal has been covenanted. The entire clarification of the CBDT is reproduced for the sake of ready reference: Circular : No. 68 [ F.No. 245/17 /71 -A PAC], dated 17-11-1971. 899. Mistakes apparent from records - Whether can be treated as such on the basis of subsequent decision of Supreme Cour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which can be rectified u/ s 154 of the Act. 14. The Hon ble Supreme Court in the case ACIT vs. Saurashtra Kutch Stock Exchange Ltd. [173 Taxman 232] held that non consideration of a decision of Jurisdictional High court or Supreme court can be said to be a 'mistake apparent from record' which can be rectified under section 254(2). After considering the above circular and judicial pronouncements, we hold that the petition submitted by the assessee falls within the scope of section 154 of the Act. Whether Excise Duty refund is capital or revenue receipt ? 15. The Hon' ble High Court of J K in the case of Shree Balaji Alloys vs. CIT (198 Taxman 122) held that Excise duty refund, Interest subsidy and Insurance subsidy received with the object of creating avenues for perpetual employment, to eradicate the social problem of unemployment in the state by accelerated industrial development is capital receipt. 16. The relevant portion of the order of the Hon ble Court is as under: 24. A close reading the Office Memorandum and the amendment introduced thereto with para No. 3 appearing in the Central Excise Notification Nos. 56 and 57 of 11- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... incentives were made available only to the bona fide Industrial Units so that larger Public Interest of dealing with unemployment in the State, as intended, in terms of the Office Memorandum, was achieved. 29. The other factors, which had weighed with the Tribunal in determining the incentives as Production Incentives may not be decisive to determine the character of the incentive subsidies, when it is found, as demonstrated in the Office Memorandum, amendment introduced thereto and the statutory notification too that the incentives were provided with the object of creating avenues for Perpetual Employment, to eradicate the social problem of unemployment in the State by accelerated industrial development. 30. For all what has been said above, the finding of the Tribunal on the first issue 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 Hon' ble Supreme Court of India in Sahney Steel Press Works Ltd.' s case (supra) and Ponni Sugars Chemicals Ltd.' s case (supra). 31. The finding of the Tribunal that the incentives were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t except to the extent provided in the Explanation to Section 115J. The Hon ble High Court of Karnataka in the case of Hariram Hotels Pvt. Ltd. in ITA No.53/2009 dated 16.12.2015 held that the capital receipts are not subjected to the provisions of Section 115JB. 22. We also find that the Hon ble Court of Calcutta in the case of Pr. CIT Vs Ankit Metal Power Ltd. 416 ITR 591 held as under: Second issue which requires adjudication is as to whether the aforesaid incentive subsidies received by the assessee from the Government of West Bengal under the schemes in question are to be included for the purpose of computation of book profit under Section 115 JB of the Income Tax Act, 1961 as contended by the revenue by relying on the decision in the case of Apollo Tyres Ltd. Vs. CIT reported in 225 ITR 273 (SC). In this case since we have already held that in relevant assessment year 2010 - 11 the incentives Interest subsidy and Power subsidy is a capital receipt and does not fall within the definition of Income under Section 2 (24) of Income Tax Act, 1961 and when a receipt is not on in the character of income it cannot form part of the book profit under Sec ..... X X X X Extracts X X X X X X X X Extracts X X X X
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