The Revenue Has Raised The Following Substantialquestions Of Law For Consideration v. In The Instant Case Since It Was On The Issue Of Subsidy Andnot On Vat Remission?”

OD-35 & 36 IN THE HIGH COURT AT CALCUTTA Special Jurisdiction (Income Tax)ORIGINAL SIDE IA No.GA/2/2018 (Old No.GA/1197/2018)ITAT/164/2018 PRINCIPAL COMMISSIONER OF INCOMETAX-I, KOLKATA -Versus-M/S. MEGHALAYA CEMENTS LIMITED IA No.GA/1/2018 (Old No.GA/1196/2018) ITAT/164/2018 PRINCIPAL COMMISSIONER OF INCOMETAX-I, KOLKATA -Versus- M/S. MEGHALAYA CEMENTS LIMITED BEFORE: The Hon’ble JUSTICE T.S. SIVAGNANAM -And- The Hon’ble JUSTICE HIRANMAY BHATTACHARYYA Date : 23[rd] November, 2021. Appearance:Mr. Tilak Mitra, Adv....for the appellant.Mr. J. P. Khaitan, Sr. Adv.Mr. Siddharha Das, Adv.Ms. Swapna Das, Adv....for the respondent. The Court : We have heard Mr. Tilak Mitra, learned standing Counsel appearing for the appellant/Revenue and Mr. J. P.Khaitan, learned senior counsel for the respondent/assessee. We are satisfied with the reasons assigned in the affidavit filed in support of the petition and, therefore, we are exercising discretion to condone the delay in filing the appeal.Accordingly, the delay is condoned. The application is allowed.This appeal by the revenue filed under Section 260A ofthe Income Tax Act (the ‘Act’ in brevity) is directed against theorder dated 2[nd] August, 2017 passed by the Income Tax AppellateTribunal, B-Bench, Kolkata (the ‘Tribunal’) in IT(SS) Nos.148 to154/Kol/2016 for the assessment years 2007-08, to 2013-14. The revenue has raised the following substantialquestions of law for consideration : “a)Whether on the facts and circumstances of the casethe Learned Appellate Tribunal has erred in law whiletreating the amount of VAT remission as eligible fordeduction under Section 80IC of the Income Tax Act, 1961,when essentially, it is of the nature of duty draw back andcan’t be called a profit derived from industrial undertakingand cannot be reckoned in computing deduction under Section81C of the Income Tax Act, 1961 ?b)Whether on the facts and circumstances of the case theLearned Appellate Tribunal has erred in law in allowingdeduction under Section 81C of the Income Tax Act, 1961 onVAT remission which is contrary to law laid down in the caseof Ritesh Industrial Ltd. reported in [2005] 274 ITR 324 andalso in the case of CIT versus H.M. Steels Limited reportedin [2015] 62 taxmann.com 252 (Punjab & Haryana)?c)Whether on the facts and circumstances of the case theLearned Appellate Tribunal has erred in law in allowing thededuction under Section 81C of the Income Tax Act, 1961 onVAT remission by relying on the decision in the case ofMeghalaya Steels which is distinguishable and not applicable in the instant case since it was on the issue of subsidy andnot on VAT remission?” The tribunal by the impugned order allowed the assessee’sappeal following the decision of the tribunal in assessee’s owncase in ITA/2185/Kol/2014 for the assessment year 2010-11. Asagainst the said the revenue preferred appeal to this Court inITA/113/2019 which was dismissed by judgment dated 26[th] August,2019 on the ground hat the issue is covered in favour of theassessee and against the revenue by the judgment and order of theHon’ble Supreme Court in Commissioner of Income Tax vs. MeghalayaSteels Ltd. reported in [2016]383 ITR 217 (SC). The substantial questions of law raised for considerationbefore us as well as those which were raised in ITA/113/2019 areidentical. Therefore, the issues having attained finality, we areinclined to follow the decision of this Court in the earlierappeal i.e. ITA/113/2019 arising out of the assessee’s own casefor the assessment year 2010-11. The connected stay application also stands closed. (T.S. SIVAGNANAM, J.) (HIRANMAY BHATTACHARYYA, J.)