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2010 (1) TMI 696 - HC - Income TaxCIT disallowed the claim of deduction u/s 80IA after revising the order u/s 263 - Since the assessee firm was held eligible for deduction under Section 80IA, the rate declared by it at such a margin was examined by the Assessing Officer. A sum of Rs.1,72,985/- was credited on account of interest in the profit and loss account, which was not held to be eligible for deduction under Section 80IA and return submitted by the assessee was accepted, except the above deduction which was disallowed on account of interest. - CIT found the order of AO erroneous and prejudicial to revenue and directed the AO to pass fresh order - ITAT canceleld the order of CIT and restored the order of AO - Held that:- it is clear that each aspect of the case had been considered by the CIT in coming to its findings. It was clearly observed that there was low consumption of electricity and details of consumption of electricity in units per month were considered and it was observed that in view of the manufacturing turn over of over 1.33 crore, the expenditure of Rs.1,04,680/- is considered highly inadequate. The observation was also made in regard to employment of less than 10/20 workers and the assessee firm claimed to have employed 14 persons during the financial year 1999-2000, out of which 3 persons were working exclusively as office staff. Thus, it was concluded that 11 persons could be held to be engaged for manufacturing process and keeping in view of the nature of the manufacturing process, as claimed by the assessee, and its turn over, the expenses were considered very much on the lower side - Order of CIT u/s 263 restored.
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