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2013 (8) TMI 761 - AT - Income TaxRevision u/s 263 - erroneous and prejudice to revenue order – Held that:- As held in the case of Malabar Industries Co. Ltd., Vs. CIT [2000 (2) TMI 10 - SUPREME Court], the Commissioner can exercise revision jurisdictional u/s 263 if he is satisfied that the order of the assessing officer sought to be revised is (i)erroneous; and also (ii) prejudicial to the interests of the revenue – Assessing officer should be fair not only to the assessee but also to the Public Exchequer. The Assessing Officer has got to protect, on one hand, the interest of the assessee in the sense that he is not subjected to any amount of tax in excess of what is legitimately due from him, and on the other hand, he has a duty to protect the interests of the revenue and to see that no one dodged the revenue and escaped without paying the legitimate tax. The Assessing Officer is not expected to put blinkers on his eyes and mechanically accept what the assessee claims before him - The Commissioner may consider an order of the Assessing Officer to be erroneous not only when it contains some apparent error of reasoning or of law or of fact on the face of it but also when it is a stereo-typed order which simply accepts what the assessee has stated in his return and fails to make enquiries or examine the genuineness of the claim which are called for in the circumstances of the case. Arbitrariness in decision- making would always need correction regardless of whether it causes prejudice to an assessee or to the State Exchequer - While making an assessment, the ITO has a varied role to play. He is the investigator, prosecutor as well as adjudicator. As an adjudicator he is an arbitrator between the revenue and the taxpayer and he has to be fair to both. His duty to act fairly requires that when he enquires into a substantial matter like the present one, he must record a finding on the relevant issue giving, howsoever briefly, his reasons therefor. In the present case, there is no description what enquiry he has caused to come to the conclusion that the assessee is entitled for deduction u/s. 80IC of the Act - Regarding allowability of deduction u/s. 80IC of the Act from Assessing Officer's order. The assessee produced copy of letter dated November 6, 2006 addressed to the Assessing Officer and one more letter dated 15.12.2008. There is one more letter regarding claim of the assessee u/s. 80IC of the Act. It has to be noted that these letters do not bear any acknowledgement from the Assessing Officer or from the Inward section of the Department - In these circumstances, we are of the opinion that the CIT is justified in exercising his powers u/s. 263 of the Act. Manufacture of water purifiers - Assembly - Deduction u/s 80IC of the Income Tax Act, 1961 - The case of the assessee is that the assessee is engaged in the manufacturing activity and hence, the assessee is entitled for deduction u/s 80IC of the Act. The case of the DR is that the assessee is not engaged in the manufacture and it is only engaged in the work of assembling of various parts of purifier and joining them so as to make water purifier an there is no value addition to this product – Held that:- In the case under consideration, the assessee company does the assembling work to prepare water filter cum purifiers. It purchases various components like, 'chassis, body, top cover, back cover, pumps, PCB, wire harness, some hardware and plastic components from different vendors from all over India, assembles these components to get a finished product - A new distinct article which is called 'water purifier' came into existence having commercial market and the original commodity no longer remained and the new product has recognized as distinct commodity - Assessee is engaged in the manufacture of water purifiers and therefore entitled for deduction u/s 80IC.
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