TaxTMI 
TaxTMI 
2022 (10) TMI 564
X X X X Extracts X X X X
X X X X Extracts X X X X
....regard to the appeal before it arising out of assessment order dated 16/11/2016 u/s 143(3) of the Income Tax Act, 1961 passed by ACIT, Special Range-04, New Delhi (hereinafter referred to as the Assessing Officer 'AO'). 2. The facts in brief are the assessee company is engaged in the business of manufacturing of agro chemicals, pesticides etc. The assessee company is having a unit in Jammu & Kashmir on which deduction u/s 80IC has been claimed. During the assessment proceedings, Ld AO gathered that the assessee has received excise refund amounting to Rs. 6,76,32,413/- and interest subsidy amounting to Rs. 32,77,053/- which have been claimed as capital receipts. The assessee submitted that these incentives were given with the objects to a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ment, under the scheme/policy of the Government of India, Ministry of Commerce & Industry. The Appellant has submitted that the Company had stated in the Notes forming part of accounts that the said receipts is not includible for computing book profit u/s 115JB of the Act, even though it is credited to Profit and Loss account. The Appellant further contended that the Appellant company has rightly reduced ' Capital Receipts' of Rs. 7,08,09,466/- for working out Book Profit since the same is completely exempt from Income Tax. It is seen that these incentives has been credited by the Appellant Company to the P&L account. While filing the return of income, the Appellant Company has excluded these incentives from the book profit....
X X X X Extracts X X X X
X X X X Extracts X X X X
....aw. 3. That the Ld. CIT(A) has erred both in law and on the facts of the case in confirming the total book profit of Rs. 12,20,88,089/- as against a sum of Rs.5,12,78,78,623/- declared in Return filed by the Appellant in an arbitrary and uncalled for manner. 4. That the Appellant company has rightly reduced 'Capital Receipts' of Rs. 7,08,09,466/- for working out Book Profits since the same is completely exempt and not liable for income tax and as such, the action of the Ld. CIT(A)-35, N. Delhi in confirming the action of the Ld. A.A. is unjustified, illegal, arbitrary and against the principle of natural justice. 5. That the provisions of MAT are applicable to the Appellant company and since the Excise Duty Re....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... computation of MAT would defeat two fundamental principles, it would levy tax on receipt which is not in the nature of income at all and secondly it would not result in arriving at real working results of the company. The real working result can be arrived at only after excluding this receipt which has been credited to P&L a/c and not otherwise. 7. That the order passed by the Ld. DCIT and confirmed by the CIT(A) and subject matter of present appeal, is an arbitrary and biased order rather than legal, judicious and rationale, stands vitiated and as such liable to be set-aside. 8. That in the case of Dynamic Orthopaedic Pvt. Ltd. Vs. CIT, Cochin, Kerala, the Hon'ble Supreme Court has already referred the matter to a larger....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e-2 (1) (2), Ahmedabad, 2020 (12) TMI 439 - ITAT Ahmedabad - Dated.- November 24, 2020 vii.M/s. Ramgad Minerals & Mining Ltd. Vs. ACIT Circle - 1, Bellary, 2020 (11) TMI 174 - ITAT Bangalore - Dated.- November 4, 2020 viii.M/s. Maithan Steel & Power Ltd. Vs. Principal Commissioner of Income Tax, Kolkata, 2020 (3) TMI 114 - ITAT Kolkata - Dated.- February 26,2020 8. On the other hand, Ld. DR relied judgment of Hon'ble Karnataka High Court in B & B Infratech Ltd. vs. Income Tax Officer, Ward 12(1), Bangalore (2016) 76 taxmann.com 188 to contend that Hon'ble High Court was considering the question, "Whether the profit shown in the books of account for the purpose of taxable liability as per the provisions of Section 115- J....
X X X X Extracts X X X X
X X X X Extracts X X X X
....lcutta High Court in the case of Ankit Metal and Power Ltd. (supra) was directly dealing with the question whether the incentives received from the Government for setting up power plant in the backward regions of West Bengal are to be included for the purpose of computation of book profits u/s 115JB and after taking into consideration the judgment of Hon'ble Supreme Court in Appollo Tyres Ltd. (supra) observed that the income in question, in that case was taxable but was exempt under specific provision of the Act, as such it was to be included as a part of book profit. But since a receipt is not in the nature of income at all, it cannot be included in book profit for the purpose of computation u/s 115JB and accordingly held that interest in....