ITA Nos. 3934/Del/2014, 3848/Del/2014 and 3437/Del/2014

Parties Involved

Facts Summary

The appeals in ITA Nos. 3934/Del/2014, 3848/Del/2014 and 3437/Del/2014 for Assessment Years 2005-06 and 2006-07 arise from the order of the Commissioner of Income Tax (Appeals)-V, New Delhi dated 30.04.2014 and 13.03.2014 against the order of assessment passed by the Assessing Officer, Addl. CIT, Range-7, New Delhi and Addl. CIT, Range-4. The assessee, M/s. Jindal Saw Ltd, is in the business of manufacturing pipes used in supply of oil/gas and water pipelines. The assessee has an Export Oriented Unit (EOU) at Mundra and an overseas branch in the United States of America (USA). The assessee has consistently followed the Accounting Standard - 11 (AS 11) for converting the balance sheet and profit and loss account of the US Branch from USD to INR. The assessee excluded the translation gain from the computation of taxable income as it was notional in nature. The assessee also received an excise duty refund of Rs 1,63,15,661/- which was earlier treated as revenue receipt but was later claimed to be a capital receipt.…

Legal Issues

• 1. Whether the Commissioner of Income Tax (Appeals) was justified in deleting the addition on account of translation gain.
• 2. Whether the Commissioner of Income Tax (Appeals) was justified in treating the excise duty refund as a capital receipt.

Judgment Outcome

Decided in favour of Partly Assessee / Partly Revenue.

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