TaxTMI 
TaxTMI 
2025 (5) TMI 704
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....dentical issues are involved in all the appeals for both the years, they are taken up together and disposed of by this common order for the sake of convenience. 2. Let us take up the assessee's appeal first for AY 2007-08. The ground No. 1 raised by the assessee for AY 2007-08 was stated to be not pressed by the ld AR. Accordingly, the same is hereby dismissed as not pressed. 3. Ground Nos. 2 to 4 raised by the assessee are challenging the action of the ld CIT(A) in dismissing the assessee's additional ground raised before the ld CIT(A) seeking direction to the ld AO to treat the excise duty refund of Rs. 86,41,12,734/-, sales tax/ VAT input tax refund of Rs. 6,78,70,248/- and sales tax remission of Rs. 33,24,88,449/- as capital receipt not chargeable to tax for the reason that the said claim was not made in the return of income. 4. We have heard the rival submissions and perused the material available on record. The assessee company is engaged in the business of manufacturing various types of pipes. In the wake of devastation caused by earthquake in the Kutch District of Gujarat, the Central Government, in public interest, issued Notification No.39/2001-Central Excise dat....
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.... considered; Sales Tax Exemption: - the eligible unit will be entitled to purchase the raw materials, packing materials and all the processing materials utilized for the purpose of manufacturing goods, without the payment of sales tax; - In addition, it will be exempt from the payment of sales tax in respect of sale of finished goods, intermediates, by-products, and scrap produced by it ; Sales Tax Deferment Unit will have to pay the amount of sales tax to the Government on the finished goods, intermediates, by-products, waste and scrap manufactured by it after the prescribed period of time and the amount so payable will be recovered in six equal annual instalments by the Sales Tax Dept, as per certain conditions; Option - While applying for the scheme, the unit will have to submit its option before the approving authority indicating option for sales tax exemption or sales tax deferment Composite Scheme - The units with capital investment exceeding Rs. 100 crore will be entitled to the benefit of both the schemes salės tax exemption and sales tax deferment; - Under the scheme, the eligibl....
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....tax deferment in Form-109; - On receipt of application made under sub-rule (3), the Commissioner may issue to the eligible unit a Certificate of Entitlement im Form-110 effective from the appointed day subject to the provisions of this Chapter and the terms and conditions of the respective Government Resolutions or notifications, on the basis of which the eligible unit was granted the Eligibility Certificate; Remission of tax - Subject to the provisions of section 11, the eligible units to whom a Certificate of Entitlement has been issued under subrule (4) of rule 18A shall be granted refund of the tax [(excluding additional tax)] paid on purchase of taxable goods so manufactured; - Subject to the provisions of section 11, the eligible unit shall- (i) not claim tax credit of the amount equivalent to the amount of refund granted under clause (a) of this sub- rule; (ii) claim tax credit of additional tax paid on purchase of taxable goods. - The eligible unit shall make an application for refund along with its return to the concerned Commercial Tax officer and such Officer shall, as far as possible, grant refund subject to....
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....on'ble Apex Court in the case of Goetze (India) Limited vs CIT reported in 284 1TR 323 (SC). 5. It is not in dispute that the assessee had indeed offered the receipt of excise duty refund, sales tax remission and sales/ VAT input tax refund in the return of income. The assessee made a fresh claim by way of an additional ground before the ld CIT(A) that the aforesaid receipts are to be construed as capital receipts not chargeable to tax as it was granted for the purpose of setting up all the industrial unit pursuant to devastations caused by earthquake in the Kutch District of Gujarat. This additional ground was sought was dismissed by the ld CIT(A) by applying the decision of Hon'ble Supreme Court in the case of Goetze India reported in 284 ITR 323. But on careful reading of para 4 of the decision of the Hon'ble Supreme Court, we find that the said restriction of not entertaining a fresh claim made by the assessee otherwise this by way of a valid return, applies only to ld AO and it does not restrict on the powers of the Income Tax Appellate Tribunal u/s 254 of the Act to accept the same. This goes to prove that the appellate authority could entertain a claim if the ....
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....s enclosed in Pages 71 to 81 of the Paper Book. The Central Excise Notification No/. 39/2001 dated 31.7.2001 is enclosed in Pages 82 to 84 of the Paper Book. The Certificates issued by Chief Commissioner of Central Excise & Customs, Ahmedabad and Principal Secretary of Industries & Mines Department to Government of Gujarat are enclosed in Pages 85 to 86 of the Paper Book. The workings for claim of excise duty refund made by the assessee are enclosed in Page 87 of the Paper Book. It is trite law that the taxation of excise duty refund pursuant to incentive scheme is to be determined by the purpose for which the same is granted and not the form / mode / manner in which it is determined or disbursed. 'Purpose Test' qua the incentive scheme is the relevant consideration and not the manner of determining the incentive. Reliance in this regard is placed on the decision of Hon'ble Supreme Court in the case of CIT vs Ponni Sugars and Chemicals Ltd reported in 306 ITR 392 (SC). We find that the ld AR before us relied on the decision of Hon'ble Gujarat High Court in the case of SAL Steel Limited vs Union of India reported in Special Civil Application No. 6299 of 2008 and 5909,6300,6298,5907,....
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....ssue in favour of the assessee and we do not find any infirmity in the said order granting relief to the assessee. Accordingly, the Ground No. 2 raised by the revenue is dismissed. " 6. Respectfully following the aforesaid decision, we direct the ld AO to treat the receipt of aforesaid incentives under the Incentive Scheme as capital receipts not chargeable to tax. Accordingly, the Ground Nos. 2 to 4 raised by the assessee are allowed. 7. Ground No. 5 raised by the assessee is general in nature and does not require any specific adjudication. 8. In the result, the appeal of the assessee for AY 2007-08 is partly allowed. ITA No. 3016/Del/2015 (Revenue Appeal) - AY 2007-08 9. The only issue to be decided in this appeal of the revenue is challenging the restriction of disallowance of Rs. 2,83,317/- instead of 5,25,22,992/- made by the ld AO u/s 14A of the Act read with Rule 8D(2) of the Income Tax Rules, 1962. 10. We have heard the rival submissions and perused the material available on record. During the year under consideration, the assessee received dividend income amounting to Rs. 2,83,31,675/- from various group companies. The assessee suo moto made disallowance ....
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....pts to be capital receipts not chargeable to tax in assessee's own case for AY 2005-06 vide order dated 24.09.2024. Respectfully following the same, Ground Nos. 2 to 4 raised by the assessee are hereby allowed. 16. Ground No. 5 raised by the assessee is general in nature and does not require any specific adjudication. 17. The assessee has raised additional grounds for claim of deduction of education cess, which was stated to be not pressed by the ld AR at the time of hearing. Accordingly, the same is not admitted herein. 18. In the result, the appeal of the assessee for AY 2008-09 is partly allowed. ITA No. 3017/Del/2015 (Revenue Appeal) - AY 2008-09 19. The first issue to be decided in this appeal is as to whether the ld CIT(A) was justified in restricting the disallowance of expenses u/s 14A of the Act to Rs. 1,42,936/-/- as against Rs. 3,39,66,565/- made by the ld AO in the facts and circumstances of the instant case. 20. We have heard the rival submissions and perused the material available on record. The assessee during the year under consideration had received dividend income amounting to Rs. 1,61,46,113/-. As in AY 2007-08, these are old investments brought....
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....Directors' Fees for services relating to investment division 50,000 Total Expenditure : 6,17,313 Disallowance in propertion of Investment whose income is exempt to total investment = Total expenses of Investment division x Investment whose income is exempt/total Investment = 540918 x 6695.64/29632.68 1,42,936 Details of Non Current Investments Rs. In lacs (a) Investment whose Income is exempt 6,695.64 (b) Investment whose Income is taxable 22,937.04 Total : 29,632.68 23. The ld AO without recording the objective satisfaction with cogent reasons as to why the aforesaid basis is incorrect, directly proceeded to apply the computation mechanism provided in the Rule 8D(2)(iii) of the Rules and proceeded to work out the disallowance thereon in the sum of Rs. 54,85,265/-. The recording of objective satisfaction with cogent reasons is mandated in terms of section 14A(2) of the Act read with Rule 8D(1) of the Rules. This issue is no longer res....