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2013 (8) TMI 663 - AT - Income TaxDeduction u/s 10B - Benefit to 100% EOU - Use of old plant and machinery - conversion of existing unit - Whether the assessee is entitled to claim benefit available to 100% EOU u/s. 10B of the Act read with Circular No. 01/2005 dated 6.1.2005 issued by the CBDT - AO's contention that the old machinery transferred to the new unit exceeded 20% limit - Held that:- Revenue cannot have doubt regarding genuineness of the documents as the documents were issued by Government authorities. It was also made clear before the lower authorities that these are available at the time of survey - The assessee has taken the plant and machinery from M/s. Balaji Agro Oil Industries Pvt. Ltd. which was engaged in the business of castor oil extraction and the present assessee is engaged in chemical business. There is nothing on record to show that the assessee used the machinery used for oil extraction by Balaji Agro Oil Industries Ltd., for the purpose of manufacturing fine chemicals. Further though there was a survey action, the lower authorities not brought on record the bifurcation of the machinery which are already put in to use by Balaji Agro Oil Industries. The Assessing Officer not made an allegation that the assessee has not furnished the details of old and new plant and machinery - existing DTA (domestic tariff area) unit can be converted into 100% EOU as per Government of India policy and this is enumerated in Circular No. 1/2005 dated 6.1.2005 issued by the CBDT. Being so, an assessee cannot be denied deduction u/s. 10B of the Act. Further, the assessee in this case applied for approval of Unit-II as 100% EOU to Development Commissioner on 18.12.2002 and the assessee was granted approval as 100% EOU by the Asst. Development Commissioner, Office of Development Commissioner, Visakhapatnam SEZ and issued green card under 100% EOU scheme on 25.4.2003. Deduction u/s. 10B has to be allowed to the assessee from the date it got the approval as 100% EOU i.e., 25.4.2003 and the Assessing Officer is directed to allow deduction u/s. 10B from the date of approval as 100% EOU by the competent authority for the unexpired period of 10 consecutive assessment years commencing from the assessment year 2004-05 being regarded as second year of production in first year of commercial production being A.Y. 2003-04. This is so because, even if the new unit was commenced in the FY 2002-03 relevant to A.Y. 2003-04, the claim of deduction u/s. 10B cannot be denied in the FY 2003-04 relevant to A.Y. 2004-05 as this year would be the second year of claim of deduction u/s. 10B of the IT Act - Decided against Revenue. Jurisdiction of CIT - CIT set aside claim of 100% depreciation of capital equipment - Held that:- Admittedly, the CIT(A) has no power to remit the issue back to the file of the Assessing Officer with effect from 1.6.2001 as the words "or he may set aside" have been removed from section 251(1)(a) of the Act. Considering this amendment, we are inclined to hold that the CIT(A) should not have sent the issue back to the file of the Assessing Officer and he should have decided the issue by himself. Accordingly, we direct the CIT(A) to decide the issue in accordance with law - Decided in favour of Revenue.
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