Income Tax Appellate Tribunal - Kolkata
Adhunik Meghalaya Steels (P) Ltd, ... vs Department Of Income Tax on 17 July, 2014
I .T.A . N o . 1 7 0 4 / Kol. / 2 0 1 2
A s s es s m en t ye ar : 2 0 0 7 - 2 0 0 8
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IN THE INCOME TAX APP ELLATE TRIBUNAL,
KOLKATA 'C' BENCH, KOLKATA
Before Shri Shamim Yahya (Accountant Member),
and Shri George Mathan (Judicial Member)
I.T .A. No. 17 04/Kol./ 2012
Assessment year : 200 7-2008
Assi stant Commissio ner of Income Tax,.......................................Appellant
Central Ci rcle-III, Kolkata
Aayaka r Bhawan (Poorv a),
110, Shanti Pally, 3 r d Floor,
Kolkata-700 107
-Vs.-
M/s. Adhunik Meghalaya Steel s (P ) L td.,.....................................Respondent
14, Ne taji Subhas Road, 2 n d Floor,
Kolkata-700 001
[PAN : A ADCA 0840 N ]
Appearances by:
Shri M. L. Sar dar, JCIT, Sr. D.R. , fo r the Department
Shri Rajeeva Kumar, Advocate, for the assessee
Date of co ncluding the hearing : Ju ly 15, 2014
Date of pronouncing the orde r : Ju ly 17, 2014
O R D E R
Per George Mathan:
This is an appeal filed by the Revenue against the order of ld. Commissioner of Income Tax (Appeals), Central-1, Kolkata in Appeal No. 405/CC-III/CIT(A)C-1/Kol/09-10 dated 27.09.2012 for the assessment year 2007-08.
2. Shri M .L. Sardar, ld. JCIT, S r. D.R., represented on behalf of the Revenue and Shri Rajeeva Kumar, Advocate, represented on behalf of the assessee.
3. In the Revenue's appeal , the Revenue has raised the following grounds:-
I .T.A . N o . 1 7 0 4 / Kol. / 2 0 1 2 A s s es s m en t ye ar : 2 0 0 7 - 2 0 0 8 Page 2 of 4 (1) That the ld. CIT(A) erred in bo th fact and law in treating the excise duty refund as capital receipt in the hands of the assessee instead o f revenue receipt.
(2) That the ld.CIT(A) erred in interpreting the judgment of the Apex Court in the case of Po nni Sugar & Chemicals Limited 306 ITR 392.
4. At the time of hearing, it was submitted by the ld. A.R. that the issue in appeal was squarel y covered by the decision of the Coordinate Bench of this Tribunal in assessee's own case for the assessment year 2006-07
5. Ld. Sr. D.R. vehemently supported the order of the Assessing Officer. It was the submission that the excise duty refund was liable to be treated as revenue receipt and not capital receipt.
6. We have considered the rival submissions. A perusal of the decision of the Coordinate Bench of this Tribunal in assessee's own case for the assessment year 2006-07 being immediately preceding assessment year in ITA No. 731/Kol./2009 dated 27.11.2009 shows that on an identical issue, the Coordinate Bench of this Tribunal has held as follows:-
"3.7. We observe that the ld. AR submitted that the outstanding term lo an was reduced by payment o f the amount of refund of excise duty and accordingly, the assessee had utilized the excise duty refund to wards repayment of term loan. The ld. DR during the course of hearing has not disputed the above contention of the ld. AR. We are of the considered view that if the refund of excise duty is utilized fo r setting up or expansion of industry in the backward area. It is a capital receip t, as held by the Hon'ble jurisdictional High Court in the case of Balarampur Chini Mills Ltd. (supra). The Ho n'ble Supreme Court in the case of Ponni Sugars & Chemicals Ltd. (supra) has held that the character of the receipts in the hands of the assessee has to be determined with respect to the purpo se fo r which the subsidy is given. The point of time on which the subsidy is paid is not relevant. It was held by their Lo rdships of Hon'ble Supreme Co urt that if the object of the subsidy scheme was to enable the assessee to run the business more pro fitably, then the receipt is on revenue account and, on the other hand, if the object of the assistance under the subsidy I .T.A . N o . 1 7 0 4 / Kol. / 2 0 1 2 A s s es s m en t ye ar : 2 0 0 7 - 2 0 0 8 Page 3 of 4 scheme was to enable the assessee to set up a new unit or to expand the existing unit, then the receipt of the subsidy was on capital account. The form of mechanism thro ugh which the subsidy is given is relevant.
3.8. Considering the above decisions, we find substance in the submission of the ld. AR that the refund of excise duty o f Rs.1,97,28,534/- is the capital receipt in the hand s of the assessee. Ho wever, the relevant facts to substantiate the above contention of the ld. AR are not o n record. Therefore, we direct the AO to obtain the requisite details from the assessee and if the said refund of excise duty of Rs.1,97,28,534/- has been utilized by the assessee for repayment of the term loan taken by it fo r setting up of the industrial undertaking/expansion of the industrial unit, the said amount be considered as capital receip t. Subject to above observatio n, we uphold the order of the ld. CIT(A) and reject the ground o f appeal taken by the Department".
7. In these circumstances, respectfully following the decision of the Coordinate Bench of this Tribunal as extracted above as it is noticed that the ld. CIT(Appeals) has followed judicial discipline in following the decision of the Coordinate Bench of this Tribunal in assessee's own case referred to supra, the finding of the ld. CIT(Appeals) stands confirmed.
8. In the result, the appeal of the Revenue is dismissed.
Order pronounced in the open Court on 17 t h July, 2014.
Sd/- Sd/-
Shamim Yahya George M athan
(Accountant Member) (Judicial Member)
Kolkata, the 17 t h day of July, 2014
Copies to : (1) Assi stant Commissio ner of Income Tax, Central Ci rcle-III, Kolkata Aayaka r Bhawan (Poorv a), 110, Shanti Pally, 3 r d Floor, Kolkata-700 107 (2) M/s. Adhunik Meghalaya Steel s (P ) L td.
14, Ne taji Subhas Road, 2 n d Floor, Kolkata-700 001 I .T.A . N o . 1 7 0 4 / Kol. / 2 0 1 2 A s s es s m en t ye ar : 2 0 0 7 - 2 0 0 8 Page 4 of 4 (3) Commissioner of Inco me-tax (Appeals) (4) Commissioner of Income Tax (5) The Departmental Representative (6) Guard File By o rder Assistant Registrar Income Tax Appellate Tribunal Kolkata benches, Ko lkata Laha/Sr. P.S.