Excise duty refund eligible for deduction u/s 80-IB

M/s J.K. Aluminum Co Vs. ITO (ITAT Delhi)

Fats of the Case:- The assessee is a firm engaged in the business of manufacture of aluminum wire rods at IGP, SIDCO, Phase-II Samba, Jammu & Kashmir. During the assessment proceedings, the assessee had filed computation of taxable income wherein deduction u/s 80IB amounting to Rs 5,85,84,089/- was claimed. The A.O went through the details and found that the assessee had received excise duty refund of Rs 5,68,41,800/- during the financial year. The A.O by applying ratio laid down by the Supreme Court in the case of Liberty India vs. CIT 225 CTR 233 and the decision of ITAT, Amritsar Bench, in the case of M/s Shree Balaji Alloys vs. ITO in ITA No.255/Asr/2009 for the assessment year 2005-06 did not accept the assessee’ s claim for relief u/s 80IB of the Act in relation thereto. When this was proposed to the assessee, the assessee furnished a judgment of Delhi High Court in the case of CIT vs. Dharampal Premchand Ltd. 317 ITR 353 wherein this issue has been claimed to have been decided in its favour. The A.O, however, taking support from the decision of the Supreme Court, went on to disallow the claim of the assessee in respect of this excise duty refund. On Appeal Honorable ITAT Allow the claim of the Assessee relying on the Supreme Court decision in the case  of Dharam Pal Prem Chand Ltd.

Decision of the Tribunal :- The case of the assessee is concerned with the refund of excise duty and consideration of the same for deduction u/s 80IB of the Act. The Scheme as well as the methodology of the operations are all discussed so as to highlight the distinction of this case from the decision of Liberty India. In any case, the decision of Dharam Pal Prem Chand Ltd. of Delhi High Court has been affirmed by the Supreme Court which fact itself cannot be ignored as the case of Dharampal Premchand Ltd. was concerned with the issue relating to section 80.IB of the Act.

M/s J.K. Aluminum Co vs. ITO (ITAT Delhi)

ITA No. 3303/Del/2010
Asst. Year: 2007- 08

O R D E R

PER VEERABHADRAPPA, V.P.

This is an appeal filed by the assessee arising out of the order dated 24.05.2010 of the CIT (Appeals) for the assessment year 2007-08.

2. The only issue in this appeal relates to the assessee’s claim for deduction u/s 80IB in respect of refund of excise duty. The assessee is a firm engaged in the business of manufacture of aluminum wire rods at IGP, SIDCO, Phase-II Samba, Jammu & Kashmir. During the assessment proceedings, the assessee had filed computation of taxable income wherein deduction u/s 80IB amounting to Rs 5,85,84,089/- was claimed. The A.O went through the details and found that the assessee had received excise duty refund of Rs 5,68,41,800/- during the financial year. The A.O by applying ratio laid down by the Supreme Court in the case of Liberty India vs. CIT 225 CTR 233 and the decision of ITAT, Amritsar Bench, in the case of M/s Shree Balaji Alloys vs. ITO in ITA No.255/Asr/2009 for the assessment year 2005-06 did not accept the assessee’ s claim for relief u/s 80IB of the Act in relation thereto. When this was proposed to the assessee, the assessee furnished a judgment of Delhi High Court in the case of CIT vs. Dharampal Premchand Ltd. 317 ITR 353 wherein this issue has been claimed to have been decided in its favour. The A.O, however, taking support from the decision of the Supreme Court, went on to disallow the claim of the assessee in respect of this excise duty refund.