Relief to Jindal Saw, Income Tax not Applicable on Incentives Received as Excise Duty Refund, Sales Tax Remission, Sales/VAT Input Tax Refund: ITAT [Read Order]
Incentives were provided to the assessee in the form of excise duty refunds, sales tax remissions, and sales/VAT input tax refunds, which are considered capital receipts and are exempt from taxation
![Relief to Jindal Saw, Income Tax not Applicable on Incentives Received as Excise Duty Refund, Sales Tax Remission, Sales/VAT Input Tax Refund: ITAT [Read Order]](https://www.taxscan.in/wp-content/uploads/2025/05/Relief-to-Jindal-Saw-Income-Tax-Applicable-Incentives-Received-Excise-Duty-Refund-Sales-Tax-Remission-Sales-VAT-Input-Tax-Refund-ITAT-TAXSCAN.jpg "Relief to Jindal Saw, Income Tax not Applicable on Incentives Received as Excise Duty Refund, Sales Tax Remission, Sales/VAT Input Tax Refund: ITAT [Read Order]")
In a ruling in favour of Jindal Saw Ltd , the Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has ruled that incentives received in the form of sales tax remission, excise duty refund, or sales/vat input tax refund are exempted from income tax. The assessee company is engaged in the business of producing various types of pipes. Following the earthquake that devastated Gujarat's...
In a ruling in favour of Jindal Saw Ltd , the Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has ruled that incentives received in the form of sales tax remission, excise duty refund, or sales/vat input tax refund are exempted from income tax.
The assessee company is engaged in the business of producing various types of pipes. Following the earthquake that devastated Gujarat's Kutch District, the Central Government, acting in the public interest, released Notification No.39/2001-Central Excise on July 31, 2001.
The assessee established the Anti Corrosion and Concrete Weight Coating (ACCWC) pipe coating unit at Mundra, Gujarat, in 2003. The assessee then established the Integrated Pipe Unit (IPU), a new pipe manufacturing facility in Mundra, Gujarat, in 2005.
The assessee had established the new units in accordance with the aforementioned Notifications, and the Customs and Central Excise, Ahmedabad certificate at Page Nos. 86-87 of the Paper Book attests to the fact that the new units were established within the time frame specified in the Notifications.
The assessee qualified for the Incentive Scheme 2001's composite option (exemption and delay of sales tax) for Kutch district's economic growth. In the income return, the assessee provided proof of receipt for the sales tax remission, excise duty refund, and sales/VAT input tax refund. Before the CIT(A), the assessee filed a new claim using an additional ground, arguing that the receipts should be interpreted as capital receipts exempt from taxation because they were given to establish all of the industrial units in response to the earthquake-related destruction in Gujarat's Kutch District.
CLUB YOUR INCOME - Because Who Said Money Can’t Hang Out Together? Click here
Notice u/s 148 of Income Tax Act Issued Beyond Limitation Period: Delhi HC Sets Aside Proceedings [Read Order]
The two member bench of Yogesh Kumar U.S. (Judicial Member) and M. Balaganesh (Accountant Member) has observed that incentives were provided to the assessee in the form of excise duty refunds, sales tax remissions, and sales/VAT input tax refunds, which are considered capital receipts and are exempt from taxation.
CLUB YOUR INCOME - Because Who Said Money Can’t Hang Out Together? Click here
The AO was instructed by the tribunal to treat the aforementioned incentives received under the Incentive Scheme as capital receipts that are exempt from taxation.
To Read the full text of the Order CLICK HERE
Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
