Dy.CIT., Circle-1(2), Hyderabad v. Coromandel International Limited,, Secunderabad

CO 53/HYD/2014 | 2008-2009
Pronouncement Date: 21-11-2014 | Result: Dismissed

Appeal Details

RSA Number 5322523 RSA 2014
Assessee PAN AAACC7852K
Bench Hyderabad
Appeal Number CO 53/HYD/2014
Duration Of Justice 2 month(s) 12 day(s)
Appellant Dy.CIT., Circle-1(2), Hyderabad
Respondent Coromandel International Limited,, Secunderabad
Appeal Type Cross Objection
Pronouncement Date 21-11-2014
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 21-11-2014
Assessment Year 2008-2009
Appeal Filed On 09-09-2014
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B HYDERABAD BEFORE SHRI B. RAMAKOTAIAH ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY JUDICIAL MEMBER ITA NOS. 1147 & 1157/HYD/2014 ASSESSMENT YEARS : 2009-10 & 2008-09 DY. COMMISSIONER OF INCOME- TAX CIRCLE 1(2) HYDERABAD M/S COROMANDEL INTERNATIONAL LTD. HYDERABAD PAN AAACC 7852K (APPELLANT) (RESPONDENT) C. O. NOS. 52 & 53/HYD/2014 (IN ITA NOS. 1147 & 1157/HYD/2014 ASSESSMENT YEARS : 2009-10 & 2008-09) M/S COROMANDEL INTERNATIONAL LTD. HYDERABAD PAN AAACC 7852K DY. COMMISSIONER OF INCOME- TAX CIRCLE 1(2) HYDERABAD (CROSS OBJECTOR) (RESPONDENT) REVENUE BY SHRI D. SUDHAKAR RAO ASSESSEE BY SHRI R. VIJAYARAGHAVAN DATE OF HEARING 10-11-2014 DATE OF PRONOUNCEMENT 21-11-2014 O R D E R PER SAKTIJIT DEY J.M.: THESE APPEALS OF THE DEPARTMENT AND C.OS. OF ASSESS EE ARE DIRECTED AGAINST THE CONSOLIDATED ORDER DATED 14/03 /2014 PASSED BY LEARNED CIT(A)-II HYDERABAD PERTAINING TO AYS. 2008-09 AND 2 ITA NOS. 1147 & 1157/HYD/2014 & CO NOS. 52 & 53/H/14 M/S CORMOMANDEL INTERNATIONAL LTD. 2009-10. SINCE FACTS ARE IDENTICAL AND ISSUES ARE C OMMON THE APPEALS AND COS ARE CLUBBED TOGETHER AND DISPOSED O F BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. ITA NOS. 1147 & 1157/HYD/2014 2. THE EFFECTIVE GROUNDS RAISED BY THE DEPARTMENT WHICH ARE COMMON IN BOTH THE APPEALS READ AS UNDER: 2. THE LEARNED CIT(A) ERRED IN HOLDING THAT THE EXCISE D DUTY REFUND IS ENTITLED FOR BENEFIT OF 80IB DEDUCTI ON AS THE SAME IS DIRECTLY RELATED TO MANUFACTURE OF GOODS. 3. THE LEARNED CIT(A) OUGHT TO HAVE CONFIRMED THE DISALLOWANCE WHETHER THE ISSUE IN QUESTION IS COVER ED BY THE APEX COURTS DECISION IN THE CASE OF LIBERTY INDIA LTD. 317 ITR 218. 3. BRIEFLY THE FACTS RELATING TO THE AFORESAID I SSUE ARE ASSESSEE A COMPANY IS ENGAGED IN THE MANUFACTURE AN D SALE OF PESTICIDES AND FERTILIZERS. ASSESSEE FOR THE PURPOS E OF MANUFACTURING PESTICIDES HAS SET UP A UNIT IN JAMM U AND KASHMIR (IN SHORT J&K). GOVERNMENT OF INDIA DECLARED A NEW INDUSTRIAL POLICY HOLDING OUT VARIOUS CONCESSIONS AND INCENTIV ES FOR THE STATE OF J&K VIDE NOTIFICATION NO. 1(13)2000-NER DATED 1 4/06/2002 FOR ENABLING STATE OF J&K TO DEVELOP AN ENVIRONMENT FOR INDUSTRIAL DEVELOPMENT IMPROVING AVAILABILITY OF CAPITAL AND INCREASE IN MARKET ACCESS TO PROVIDE FILLIP TO PRIVATE INVESTME NT IN THE STATE. PURSUANT TO THE SAID INDUSTRIAL POLICY OF GOVERNMEN T OF INDIA VARIOUS INCENTIVES LIKE CAPITAL SUBSIDY INTEREST S UBSIDY INSURANCE SUBSIDY ETC. WERE ANNOUNCED FOR NEW UNITS TO BE SE T UP IN THE STATE OF J&K. AS PART OF THE OVERALL INCENTIVES TO BE PROVIDED FOR THE NEW UNITS TO BE SET UP IN STATE OF J&K EXCISE DUTY SUBSIDY WAS ALSO ANNOUNCED BY CENTRAL EXCISE DEPARTMENT VIDE NO TIFICATION NO. 56/02-CE DATED 14/11/02 ON THE GOODS MANUFACTURED A T THE 3 ITA NOS. 1147 & 1157/HYD/2014 & CO NOS. 52 & 53/H/14 M/S CORMOMANDEL INTERNATIONAL LTD. UNDERTAKING SITUATED IN SPECIFIED AREAS OF J&K. AS PER THE SAID NOTIFICATION ASSESSEE BECAME ENTITLED TO CLAIM EXC ISE DUTY REFUND ON ACCOUNT OF DUTIES PAID OTHER THAN THOSE THROUGH CENVAT CREDIT OF THE GOODS MANUFACTURED. AS PER THE PROCEDURE LAI D DOWN IN THE AFORESAID NOTIFICATION THE MANUFACTURER HAS TO SUB MIT A STATEMENT OF DUTIES PAID (OTHER THAN THOSE SETTLED THROUGH CE NVAT CREDIT) TO THE EXCISE AUTHORITIES BY 7 TH OF NEXT MONTH IN WHICH SUCH DUTIES HAVE BEEN PAID. EXCISE AUTHORITIES AFTER DUE VERIFI CATION WOULD REFUND DUTIES PAID TO THE MANUFACTURER BY 15 TH OF NEXT MONTH. WHERE THERE IS LIKELY DELAY IN THE VERIFICATION E XCISE AUTHORITIES WOULD REFUND DUTIES PAID BY MANUFACTURER ON A PROVI SIONAL BASIS AND THEREAFTER MAKE NECESSARY ADJUSTMENTS FROM THE REFUND ACCRUING SUBSEQUENTLY. IN TERMS WITH THE EXEMPTION NOTIFICATION ASSESSEE CLAIMED REFUND OF EXCISE DUTY AND AFTER VE RIFYING ASSESSEES CLAIM CENTRAL EXCISE AUTHORITIES GRANTE D REFUND OF EXCISE DUTY PAID IN TERMS WITH THE INDUSTRIAL POLIC Y AS WELL AS NOTIFICATION ISSUED BY THE CENTRAL EXCISE DEPARTMEN T AMOUNTING TO RS. 4 01 41 625 FOR AY 2008-09 AND RS. 3 58 56 467 FOR AY 2009- 10. IN THE RETURNS FILED FOR THE AFORESAID ASSESSME NT YEARS THOUGH ASSESSEE TREATED EXCISE DUTY REFUNDED AS INCOME BU T AT THE SAME TIME IT CLAIMED DEDUCTION U/S 80IB ON THE SAID INC OME. 4. AO IN COURSE OF ASSESSMENT PROCEEDING FOR THE AY 2009-10 WHILE EXAMINING THE ACCOUNTS OF ASSESSEE NOTICED TH AT ASSESSEE HAS INCLUDED EXCISE REFUND OF RS. 3 58 56 467 FOR THE PURPOSE OF COMPUTATION OF DEDUCTION U/S 80IB. WHEN THE AO PROP OSED TO DISALLOW 80IB DEDUCTION ON THE EXCISE DUTY REFUND B Y RELYING UPON THE DECISION OF HONBLE SUPREME COURT IN CASE OF LI BERTY INDIA 316 ITR 218 ON THE GROUND THAT SUCH INCOME IS NOT ATTRI BUTABLE TO PROFIT DERIVED FROM THE ELIGIBLE BUSINESS ASSESSEE OBJEC TED TO SUCH DISALLOWANCE. HOWEVER AO OVERRIDING THE OBJECTIONS OF ASSESSEE 4 ITA NOS. 1147 & 1157/HYD/2014 & CO NOS. 52 & 53/H/14 M/S CORMOMANDEL INTERNATIONAL LTD. EXCLUDED THE EXCISE DUTY REFUND OF RS. 3 58 56 467 FROM THE BUSINESS PROFITS WHILE COMPUTING DEDUCTION U/S 80IB . SIMILARLY THOUGH IN THE ASSESSMENT ORDER PASSED U/S 143(3) OF THE ACT FOR THE AY 2008-09 AO HAD ALLOWED DEDUCTION U/S 80IB B Y TREATING EXCISE DUTY REFUND AS BUSINESS PROFIT. SUBSEQUENTLY ON 15/06/2012 AO PASSED AN ORDER U/S 154 OF THE ACT W ITHDRAWING DEDUCTION U/S 80IB ON THE EXCISE DUTY REFUND OF RS. 4 01 41 625. BEING AGGRIEVED OF THE DISALLOWANCE OF DEDUCTION U/ S 80IB ON THE EXCISE DUTY REFUND ASSESSEE PREFERRED APPEALS BEFO RE LD. CIT(A). 5. LEARNED CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF ASSESSEE IN THE CONTEXT OF VARIOUS DECISIONS PLACED BEFORE HER ALLOWED ASSESSEES CLAIM OF DEDUCTION U/S 80IB ON E XCISE DUTY REFUND. THE FINDING OF THE LEARNED CIT(A) ON THIS I SSUE IS REPRODUCED HEREUNDER: 5. THE APPELLANT IS ENGAGED IN THE BUSINESS OF PEST ICIDES AND FERTILIZERS. IT HAD SET UP ITS MANUFACTURING UNIT I N JAMMU & KASHMIR WHICH IS THE BACKWARD AREA. AS PER THE GOVE RNMENT NOTIFICATION NO. 1(13)/2000-NER DATED 14.06.2002 TH E ASSESSEE IS ENTITLED FOR REFUND OF EXCISE DUTY OF 1 00% FOR PERIOD OF 10 YEARS. THIS NOTIFICATION WAS ISSUED BY GOVERNMENT OF INDIA TO PROMOTE INDUSTRIAL DEVELOPMENT TO IMPR OVE AVAILABILITY OF CAPITAL AND TO INCREASE MARKET ACCESS IN THE BACKWARD STATE OF JAM MU & KASHMIR. THE MECHANICS OF THIS EXEMPTION IS THE MA NUFACTURER WOULD SUBMIT A STATEMENT OF EXCISE DUTY PAID TO EXC ISE AUTHORITIES BY 7TH OF THE FOLLOWING MONTH IN WHICH THE EXCISE DUTY WAS PAID. THE AUTHORITIES AFTER DUE VERIFICAT ION WOULD REFUND THE EXCISE DUTY TO THE MANUFACTURER BY 15 TH OF THE FOLLOWING MONTH. IN THE INSTANT CASE THE EXCISE DU TY PAID DURING THE RELEVANT YEAR WAS RS.6.06 CRORES. THE SA LES DO NOT INCLUDE EXCISE DUTY. CORRESPONDINGLY THE EXCISE DUT Y PAID WAS ALSO NOT DEBITED TO PROFIT AND LOSS ACCOUNT. DURING THE YEAR THE APPELLANT GOT EXCISE DUTY REFUND OF RS.4.01 CRORES. THE ASSESSING OFFICER DISALLOWED DEDUCTION U/S.80IB ON EXCISE DUTY REFUND BASED ON THE DECISION OF HON'BLE SUPREM E COURT IN THE CASE OF LIBERTY INDIA LTD. (CITED SUPRA). THE H ON'BLE HIGH COURT OF JAMMU & KASHMIR IN THE CASE OF SHREE BALAJI ALLOYS 5 ITA NOS. 1147 & 1157/HYD/2014 & CO NOS. 52 & 53/H/14 M/S CORMOMANDEL INTERNATIONAL LTD. (CITED SUPRA) HAD ANALYZED THE ISSUE IN GREAT DETAI L CONSIDERING THE NEW INDUSTRIAL POLICY ON JAMMU & KASHMIR AND THE NOTIFICATION ISSUED BY THE GOVERNMENT OF INDIA AND HELD THAT THE INDUSTRIAL POLICY HAD TWO FUNDAMENTAL OBJECTIVES N AMELY I) ACCELERATION OF INDUSTRIAL DEVELOPMENT IN THE STATE OF JAMMU & KASHMIR II) GENERATION OF EMPLOYMENT IN THE STATE OF JAMMU & KASHMIR AND THEREFORE HELD THE SUBSIDY AS CAPITAL SUBSIDY. IT IS ALSO PERTINENT TO MENTION THAT THE CASE OF LIBER TY INDIA (SC) WAS NOT CONSIDERED IN THIS CASE. IN ANY CASE RELYI NG ON JUDICIAL PRECEDENTS MENTIONED AT 4(C) HOLDING T HAT THE EXCISE DUTY REFUND IS ENTITLED FOR THE BENEFIT OF 8 0-IB DEDUCTION AS EXCISE DUTY REFUND IS DIRECTLY RELATED TO MANUFA CTURE 'OF GOODS SO IS THE REFUND. IN RESULT THE ASSESSING O FFICER IS DIRECTED TO ALLOW 80-IB DEDUCTION ON EXCISE DUTY RE FUND. 6. THE LEARNED DR RELYING UPON THE DECISION OF LIBE RTY INDIA LTD. (SUPRA) SUBMITTED THAT AS EXCISE DUTY REFUND IS NOT CONNECTED WITH THE BUSINESS OF THE ASSESSEE IT CANNOT BE TREATED AS PART OF BUSINESS INCOME FOR ALLOWING DEDUCTION U/S 80IB. 7. THE LEARNED AR SUBMITTED AS PER ACCOUNTING POLIC IES OF THE ASSESSEE WHICH IS ALSO IN CONFORMITY WITH ACCOUNTI NG STANDARD INTERPRETATION (ASI) 14 EXCISE DUTY COLLECTED FROM CUSTOMERS FORMS PART OF GROSS SALES. HENCE THE SAME NEEDS TO BE EX CLUDED. THE CORRESPONDING EXCISE DUTY PAYMENT ON GOODS REMOVED ARE ALSO NOT SHOWN IN THE PROFIT AND LOSS ACCOUNT AS A CHARGE. H OWEVER WHEN EXCISE DUTY REFUND IS RECEIVED FROM THE CENTRAL EXC ISE DEPARTMENT SAME IS SHOWN AS INCOME. IT WAS SUBMITTED AS EXCISE DUTY REFUND IS A PART OF SALE PRICE IT IS TO BE TREATED AS PROFIT DERIVED FROM ELIGIBLE BUSINESS. LD. AR SUBMITTED AS EXCISE DUTY HAS DIRE CT NEXUS WITH THE MANUFACTURING ACTIVITY OF THE ASSESSEE SAME HA S TO BE CONSIDERED AS PART OF PROFIT DERIVED FROM ELIGIBLE BUSINESS HENCE ELIGIBLE FOR DEDUCTION U/S 80IB. IN SUPPORT OF SUCH CONTENTION LD. AR RELIED UPON THE FOLLOWING DECISIONS: 1. CIT VS. DHARAM PAL PREM CHAND LTD. 317 ITR 353 (DEL.) 2. CIT VS. MEGHALAYA STEELS LTD. 332 ITR 91 (GAUH ATI) 6 ITA NOS. 1147 & 1157/HYD/2014 & CO NOS. 52 & 53/H/14 M/S CORMOMANDEL INTERNATIONAL LTD. 3. M/S J.K. ALUMINIUM CO. ITA NO. 3303/DEL./2010 4. DIAMOND TOOL INDUSTRIES VS. DCIT ITA NO. 2080/ MUM/11 5. ADDL. CIT VS. TOTAL PACKAGING SERVICES ITA NO. 5346/MUM/09 8. HAVING CONSIDERED RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF REVENUE AUTHORITIES AS WELL AS OTHER MATERIALS O N RECORD AND AFTER HAVING APPLIED OUR MIND TO THE DECISIONS RELI ED UPON BY THE PARTIES WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF LD. CIT(A) IN ALLOWING BENEFIT U/S 80IB TO ASSESSEE ON EXCISE DUT Y REFUND FOR THE FOLLOWING REASONS. 9. IT IS CLEAR FROM THE ASSESSMENT ORDER THAT AO HA S DENIED 80IB DEDUCTION ON EXCISE DUTY REFUND FOR THE SOLE REASON THAT IT CANNOT BE TREATED AS INCOME DERIVED FROM ELIGIBLE BUSINESS OF THE UNDERTAKING. HOWEVER AS CAN BE SEEN FROM THE FACT S BROUGHT ON RECORD THERE IS NO DISPUTE THAT ASSESSEE HAS PAID THE EXCISE DUTY ON THE GOODS MANUFACTURED AND SOLD AND AS SUCH IT F ORMS PART OF THE SALE PRICE OF ASSESSEE. THEREFORE PAYMENT OF C ENTRAL EXCISE DUTY IS INTEGRALLY CONNECTED WITH THE MANUFACTURING AND SALE OF GOODS PRODUCED BY ASSESSEE. IT IS ALSO NOT IN DISP UTE THAT AS PER THE INDUSTRIAL POLICY RESOLUTION DECLARED FOR THE S TATE OF J&K AND CONSEQUENT TO CENTRAL EXCISE DEPARTMENT NOTIFICATIO N ASSESSEE BECAME ELIGIBLE FOR REFUND OF EXCISE DUTY PAID AFTE R SET OFF OF CENVAT CREDIT. THEREFORE IN SUM AND SUBSTANCE IT IS ONLY A REFUND OF AN AMOUNT ALREADY PAID BY ASSESSEE AND RE DUCED FROM THE SALE PRICE WHILE COMPUTING THE PROFIT. THEREFOR E WHEN ASSESSEE GETS REFUND OF AN EXPENDITURE ALREADY INCU RRED THE SAME HAS TO BE DEEMED TO BE THE PROFITS AND GAINS OF BUS INESS OR PROFESSION CARRIED ON BY ASSESSEE IN TERMS OF SECTI ON 41(1)(A) OF THE ACT. IN THAT VIEW OF THE AFTER EXCISE DUTY REF UND RECEIVED BY 7 ITA NOS. 1147 & 1157/HYD/2014 & CO NOS. 52 & 53/H/14 M/S CORMOMANDEL INTERNATIONAL LTD. ASSESSEE HAS TO BE TREATED AS PART OF THE BUSINESS PROFIT HENCE ELIGIBLE FOR DEDUCTION U/S 80IB OF THE ACT. OTHERWI SE ALSO AS PAYMENT OF EXCISE DUTY IS DIRECTLY LINKED WITH THE MANUFACTURING OF GOODS REFUND OF EXCISE DUTY HAS TO BE TREATED AS I NCOME DERIVED FROM ELIGIBLE BUSINESS AS PROVIDED U/S 80IB. IN THE AFORESAID VIEW OF THE MATTER ASSESSEE WILL BE ELIGIBLE TO CLAIM DEDUCTION U/S 80IB ON THE INCOME ACCRUING FROM REFUND OF EXCISE DUTY. SO FAR AS THE RATIO IN CASE OF LIBERTY INDIA VS. CIT (SUPRA) THE FACTS ARE CLEARLY DISTINGUISHABLE AND DO NOT APPLY TO THE FACTS OF TH E PRESENT CASE. IN CASE OF LIBERTY INDIA THE HONBLE SUPREME COURT WA S CONSIDERING THE PROFITS DERIVED FROM SALE/TRANSFER OF DEPB/DUTY DRAW BACK BENEFITS. DEPB/DUTY DRAW BACK BENEFITS IS GIVEN U NDER A SCHEME FRAMED UNDER THE CUSTOMS ACT AND IT IS TRANSFERABLE IN OTHER WORDS IT IS A MARKETABLE COMMODITY. EXCISE DUTY RE FUND BY ASSESSEE IN THE PRESENT CASE IS NEITHER A MARKETABL E COMMODITY NOR TRANSFERABLE. IT IS ONLY A REFUND OF EXPENDITUR E ALREADY INCURRED BY ASSESSEE HENCE THE DECISION OF THE HONBLE SUPR EME COURT IN CASE OF LIBERTY INDIA (SUPRA) WILL NOT APPLY. IN TH E AFORESAID VIEW OF THE MATTER WE UPHOLD THE ORDER OF LD. CIT(A) BY DI SMISSING GROUNDS RAISED. 10. IN THE RESULT APPEAL OF THE DEPARTMENT FOR BOT H THE ASSESSMENT YEARS UNDER CONSIDERATION ARE DISMISSED. C.O. NOS. 52 & 53/HYD/2014 11. GROUNDS RAISED BY ASSESSEE IN C.O. FOR AY 2009- 10 ARE AS UNDER: 1. EXCISE DUTY REBATE BEING AN INCENTIVE GRANTED TO THE RESPONDENT IN THE STATE OF JAMMU AND KASHMIR PURSU ANT TO THE NOTIFICATION ISSUED UNDER THE INDUSTRIAL POLICY OF THE STATE GOVT. OF JAMMU AND KASHMIR FOR ATTRACTING/SETTING U P OF NEW 8 ITA NOS. 1147 & 1157/HYD/2014 & CO NOS. 52 & 53/H/14 M/S CORMOMANDEL INTERNATIONAL LTD. INDUSTRIES IN THE STATE AND INCREASING THE EMPLOYME NT IN THE STATE IS A CAPITAL RECEIPT NOT LIABLE TO TAX. 2. THE LEARNED CIT(A) HAS ERRED IN NOT ADJUDICATIN G THE GROUND RELATING TO EXCISE DUTY REBATE RECEIVED BY T HE RESPONDENT IN PURSUANCE OF NOTIFICATION ISSUED UNDE R THE INDUSTRIAL POLICY OF THE STATE GOVERNMENT OF JAMMU AND KASHMIR FOR ATTRACTING/SETTING UP OF NEW INDUSTRI ES IN THE STATE AND INCREASING THE EMPLOYMENT IN THE STATE I S CAPITAL RECEIPT AND NOT LIABLE TO TAX. 12. GROUNDS RAISED BY ASSESSEE IN C.O. FOR AY 2008- 09 ARE AS UNDER: 1. EXCISE DUTY REBATE BEING AN INCENTIVE GRANTED TO THE RESPONDENT IN THE STATE OF JAMMU AND KASHMIR PURSU ANT TO THE NOTIFICATION ISSUED UNDER THE INDUSTRIAL POLICY OF THE STATE GOVT. OF JAMMU AND KASHMIR FOR ATTRACTING/SETTING U P OF NEW INDUSTRIES IN THE STATE AND INCREASING THE EMPLOYME NT IN THE STATE IS A CAPITAL RECEIPT NOT LIABLE TO TAX. 2. THE LEARNED CIT(A) HAS ERRED IN NOT ADJUDICATIN G THE GROUND RELATING TO EXCISE DUTY REBATE RECEIVED BY T HE RESPONDENT IN PURSUANCE OF NOTIFICATION ISSUED UNDE R THE INDUSTRIAL POLICY OF THE STATE GOVERNMENT OF JAMMU AND KASHMIR FOR ATTRACTING/SETTING UP OF NEW INDUSTRI ES IN THE STATE AND INCREASING THE EMPLOYMENT IN THE STATE I S CAPITAL RECEIPT AND NOT LIABLE TO TAX. 3. THAT THE LEARNED AO ERRED IN PASSING RECTIFICATI ON ORDER U/S 154 DATED 15 JUNE 2012 TO DISALLOW DEDUCTION U/ S 80IB OF THE IT ACT 1961 ON THE EXCISE DUTY REBATE RECEIVED BY THE RESPONDENT WITHOUT APPRECIATING THAT IT IS A DEBATA BLE ISSUE WHICH CANNOT BE SUBJECT TO RECTIFICATION PROCEEDING S U/S 154 OF THE ACT. 4. CIT(A) HAS ERRED IN NOT ADJUDICATING THE ADDITIO NAL GROUND RELATING TO ORDER PASSED BY AO U/S 154 OF TH E IT ACT 1961 DATED 15 JUNE 2012 DENYING DEDUCTION U/S 80IB OF THE ACT ON THE EXCISE DUTY REFUND AS THE SAME IS A DEBA TABLE ISSUE WHICH CANNOT BE SUBJECT TO RECTIFICATION PROC EEDINGS U/S 154 OF THE ACT. 13. AS CAN BE SEEN FROM THE GROUNDS THE FIRST ISSU E WHICH IS COMMON IN BOTH THE ASSESSMENT YEARS EXCISE DUTY R EFUND GRANTED 9 ITA NOS. 1147 & 1157/HYD/2014 & CO NOS. 52 & 53/H/14 M/S CORMOMANDEL INTERNATIONAL LTD. UNDER INDUSTRIAL POLICY IS IN THE NATURE OF CAPITAL RECEIPT HENCE NOT TAXABLE. IN SUPPORT OF SUCH CONTENTION LEARNED AR HAS RELIED UPON A DECISION OF HONBLE J&K HIGH COURT IN CASE OF SHR I BALAJI ALLOYS RAVENBHEL HEALTHCARE (P) LTD. VS. ACIT 333 ITR 335 . 14. WE HAVE HEARD THE PARTIES AND PERUSED THE ORDER S OF REVENUE AUTHORITIES AS WELL AS OTHER MATERIAL ON RECORD. UN DISPUTEDLY ASSESSEE HAS NOT ONLY TREATED EXCISE DUTY REFUND AS A REVENUE RECEIPT IN ITS BOOKS OF ACCOUNT BUT HAS ALSO SHOWN IT AS INCOME IN THE RETURN OF INCOME FILED FOR THE IMPUGNED ASSESSM ENT YEARS. THIS ISSUE WAS NEVER RAISED BY ASSESSEE AT THE ASSESSMEN T STAGE. THOUGH BEFORE THE FIRST APPELLATE AUTHORITY ASSESS EE RAISED THIS ISSUE BY WAY OF AN ADDITIONAL GROUND BUT THE LEAR NED CIT(A) NEITHER EXAMINED NOR CONSIDERED THE ISSUE BY MAKING A DETAILED ANALYSIS. SINCE FOR ARRIVING AT PROPER CONCLUSION A S TO WHETHER EXCISE DUTY REFUND IS IN THE NATURE OF CAPITAL OR REVENUE FACTUAL ASPECTS RELATING TO INDUSTRIAL POLICY RESOLUTION AN D NOTIFICATION GRANTING INCENTIVES HAVE TO BE LOOKED INTO WHICH H AS NOT BEEN DONE EITHER BY AO OR BY LD. CIT(A) WE ARE NOT INCL INED TO ENTER INTO THIS ISSUE AT THIS STAGE. MOREOVER THE AFORESAID I SSUE IS OF MERE ACADEMIC INTEREST CONSIDERING THE FACT THAT WE HAVE CONFIRMED THE ORDER OF LD. CIT(A) ALLOWING ASSESSEES CLAIM OF DE DUCTION U/S 80IB. ACCORDINGLY GROUNDS RAISING THIS ISSUE HAVING BECO ME INFRUCTUOUS ARE DISMISSED. 15. IN AY 2008-09 ASSESSEE HAS RAISED ONE MORE GRO UND CHALLENGING THE VALIDITY OF PROCEEDING INITIATED U/ S 154 OF THE ACT. IT WAS SUBMITTED BY LEARNED AR THAT IN THE ASSESSMENT PROCEEDING AO AFTER EXAMINING ALL DETAILS ALLOWED ASSESSEES C LAIM OF DEDUCTION U/S 80IB. THEREFORE EXERCISE OF JURISDIC TION U/S 154 OF THE ACT FOR WITHDRAWING BENEFIT U/S 80IB IN RESPECT OF EXCISE DUTY 10 ITA NOS. 1147 & 1157/HYD/2014 & CO NOS. 52 & 53/H/14 M/S CORMOMANDEL INTERNATIONAL LTD. REFUND IS NOT VALID AS IT IS A DEBATABLE ISSUE. IN SUPPORT OF SUCH PROPOSITION ASSESSEE HAS RELIED ON A NUMBER OF DEC ISIONS WHICH HAVE BEEN REFERRED TO BY LEARNED CIT(A). 16. THOUGH IN PRINCIPLE WE AGREE WITH LD. AR THAT POWERS U/S 154 CANNOT BE INVOKED FOR RECTIFYING MISTAKES ARISI NG OUT OF DEBATABLE ISSUES HOWEVER CONSIDERING THE FACT THA T WE HAVE UPHELD CIT(A)S ORDER GRANTING BENEFIT U/S 80IB TO ASSESSEE FOR THE IMPUGNED ASSESSMENT YEAR THIS ISSUE IS OF MERE ACA DEMIC INTEREST. ACCORDINGLY THE GROUNDS RAISED HAVING BE COME INFRUCTUOUS ARE DISMISSED. 17. IN THE RESULT DEPARTMENTS APPEALS AS WELL AS ASSESSEES COS ARE DISMISSED. PRONOUNCED IN THE OPEN COURT ON 21/11/2014. SD/- SD/- (B. RAMAKOTAIAH) (SAKTIJIT DEY) ACCOUNTANT MEMBER JU DICIAL MEMBER HYDERABAD DATED: 21 ST NOVEMBER 2014 KV COPY TO:- 1) DCIT CIRCLE 1(2) 4 TH FLOOR AAYAKAR BHAVAN HYDERABAD 2) M/S COROMANDEL INTERNATIONAL LD. 1-2-10 COROMA NDEL HOUSE SP ROAD SECUNDERABAD. 3) CIT(A)-II HYDERABAD 4) CIT-I RANGE 3 HYDERABAD 5)THE DEPARTMENTAL REPRESENTATIVE I.T.A.T. HYDER ABAD.