Jindal Saw Ltd. Vs DCIT (ITAT Delhi)
ITAT Delhi held that incentives in the form of excise duty refund, sales tax remission, sales/ VAT input tax refund received under the Incentive Scheme are capital receipts and hence not chargeable to income tax. Accordingly, ground of the assessee allowed.
Facts- The assessee company is engaged in the business of manufacturing various types of pipes. The assessee are challenging the action of CIT(A) in dismissing the assessee’s additional ground raised before CIT(A) seeking direction to 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.
Conclusion- The assessee in the instant case was given incentives in the form of excise duty refund, sales tax remission, sales/ VAT input tax refund. The same issue came up for adjudication in assessee’s own case before this Tribunal for AY 2005-06 in ITA 3437/Del/2014 dated 24.09.2024 wherein, it was held the excise duty refund received is clearly in the nature of capital receipt not chargeable to income tax. Thus, we direct 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.
