TMI Blog2010 (1) TMI 892X X X X Extracts X X X X X X X X Extracts X X X X ..... iness by the AO is recomputed the deduction under section 10A is also to be allowed on the recomputed profit under section 10A, no infirmity or illegality in the order of the ld. CIT(A) in this regard. Accordingly, we confirm the same, revenue's appeal is partly allowed for statistical purposes. - ITA No. 1951/Del/2009, - - - Dated:- 29-1-2010 - P.P. Tolani, Shamim Yahya, JJ. Brijesh Mathur, CA for the Appellant B. Kishore, Sr. DR for the Respondent ORDER Shamim Yahya:- 1. This appeal by the revenue is directed against the orders of the ld. CIT(A) dated 5.3.2009 pertaining to assessment year 2005- 06. 2. The first issue raised reads as under:- "On the facts and in the circumstances of the case ld. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 2.4 We have heard both the counsels and perused the records. We find that AO has not appreciated the system of accounting of the assessee. Though AO has duly noted that assessee received certain raw materials on free of cost from the customers and when the invoices is made the value of item received free of cost basis is reduced therefrom. There is no in-comprehensible item in this regard when the system of accounting has been accepted by the Revenue in earlier assessment years. Under the circumstances, we do not see any reason to interfere in the order of the ld. CIT(A). Accordingly, we affirm the same. 3. The next issue raised pertains to deletion of Rs. 60,910/- on account of interest on bank overdraft account and supposed expe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Profit as per Profit and Loss account to assessee it as Interest income, it actually disallowed Rs. 50,082/- on account of interest on OD and reduced it by Rs. 1,58,365/- to assessee Rs. 1,08,283/- as income from other sources. 6.4 In other words, when the AO disallowed Rs. 60,910/- on account of interest on bank OD and related expenditure of Rs. 10,828/- claimed, he actually did what the assessee had done in its computation of income but when he was to work out the business income, he should have reduced only Rs. 1,08,283/- from the profit and loss account to arrive at business income and should have assessed only Rs. 1,08,283/- as interest income under other sources. 6.5 Therefore, since interest on OD of Rs. 50,082/- was a busin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. Accordingly, we remit this issue to the files of the AO to decide the same afresh. Needless to add that the assessee should be given adequate opportunity of being heard. 4. The last issue raised is that ld. CIT(A) erred in directing to recompute the profits eligible for deduction under section 10A of the Income Tax Act. 4.1 On this issue AO noted that assessee has claimed exemption under section 10A as per Form 56F amounting to Rs. 2,10,16,417/- Hence, though AO had made the some recomputation in the net profit, he restricted the claim under section 10A, as per Form 56F. 4.2 Before the ld. CIT(A) the assessee appealed that the action of AO in not reworking the profit eligible under section 10A of the Act equal to 100% profits ..... X X X X Extracts X X X X X X X X Extracts X X X X
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