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2022 (5) TMI 541 - ITAT KOLKATARevision u/s 263 by CIT - non-examination of CSR expenses which according to the PCIT has wrongly been claimed as deduction unit-II, Byrnihat - HELD THAT:- We note that the issue of CSR expenses has specifically been examined by the AO during the course of assessment proceedings by issuing notice u/s 142(1) dated 25.06.2015 which was replied by the assessee by submitting complete and comprehensive details of miscellaneous expenses which contained CSR expenses also. On the basis of this, we are of the view that the AO has examined the issue and has taken a plausible view and therefore the conclusion of PCIT that issue has not been examined by the AO at the time of scrutiny assessment is not tenable and accordingly cannot be sustained Interest earned by the assessee from late payment from the sundry debtors and VAT remission shown as miscellaneous income are not the part of the eligible profit u/s 80IE and therefore deduction u/s 80IE has been allowed in excess resulting into the mistake in the assessment order which has caused prejudice to the revenue - We find that the same is arising from business activity of the assessee and has been treated as part of the profit for the purpose of deduction u/s 80IE of the Act as the interest earned from the sundry debtors who has not made the payment during the credit period allowed them. Similarly the VAT remission is also part of and arising because the business activity of the assessee. The assessee has collected sales on the applicable rates on the sales made by it availed 99% of VAT remission under the scheme of Meghalaya State Government in pursuance of Meghalaya Industries (Tax Remission) Scheme, 2006 and paid only 1% to the tax to the Govt. In our view, the said remission has direct nexus with the business of the assessee and therefore has to form a part of eligible unit and deduction u/s 80IE of the Act has to be allowed. The case of the assessee is squarely covered by the decision of case of CIT vs. Meghalaya Steel Ltd. [2016 (3) TMI 375 - SUPREME COURT] wherein the similar issue was laid down in the said case. The Hon’ble Supreme Court held that the transport subsidy, interest subsidy, power subsidy and insurance subsidy has direct nexus with the business of assessee and therefore has to be treated as the part of the eligible profit for the business of deduction u/s 80IB read with Section 80IC of the Act. We therefore following the same, hold that the exercise of revisionary jurisdiction is not valid. In view of the above facts and circumstances we are inclined to quash the order passed u/s 263 of the Act. - Appeal of assessee allowed.
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