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2015 (7) TMI 110 - AT - Income TaxEnlargement of the scope of the order passed by the CIT - 1 under section 263 - Held that:- Admittedly in this case the original assessment was set aside by the CIT -1 vide his order dated 27-9-2007. We have carefully gone through the directions issued by the CIT-1 confirmed by the Tribunal. There is no dispute that the CIT-1 has issued directions firstly in respect of the claim of deduction u/s 10B of the Act keeping in mind the provisions of section 10B(3) of the Act and subsequently the CIT -1 directed the A.O. to refer the matter to the TPO. Considering the assessment order made by the A.O. pursuant to the directions of the CIT-1 u/s 263 of the Act, we have no hesitation to hold that the A.O. has enlarged the scope of the order of the CIT-1. The observation of the ld. CIT(A) that the power of the CIT(A) are plenary power and the CIT(A) can do what the A.O. can do is misplaced for the simple reason that the CIT(A) cannot do what the A.O. cannot do. In the case in hand, the A.O. cannot enlarge the scope of the directions of the CIT issued u/s 263 of the Act, therefore, the CIT(A) also cannot enlarge the same. We, accordingly, set aside the findings of the ld. CIT(A)- Decided in favour of assessee. Disallowance of deduction u/s 10B in respect of the addition suo motu made by the assessee u/s 92-C - Held that:- In our considered opinion and understanding of the law and the understanding of the legislative intention, we cannot permit the assessee to stretch the benevolent provision to avail the benefit which the legislature never intended to. In the case in hand, there is no dispute that the assessee has under priced its services to AE’s and therefore made transfer pricing adjustment suo moto. This peculiar conduct of the assessee, if allowed to claim deduction u/s 10B of the Act will go against the legislative intention. We, therefore, decline to interfere with the finding of the lower authorities. In our considered opinion, the assessee is not entitled for deduction u/s 10B in respect of the addition of ₹ 4,09,54,804/- suo moto made by the assessee as per Form 3CEB. The cases relied upon by the assessee have not considered the relevant provisions of the Act with legislative intent and are therefore distinguished from peculiar facts and modus operandi of the case in hand.- Decided against assessee. Computation of amount eligible for exemption u/s 10B of the Act by setting of the losses of non-STPI unit - Held that:- This issue is squarely covered in favour of the assesse and against the Revenue by the decision of the Hon’ble High Court of Bombay in the case of CIT vs. Black and Veatch Consulting Pvt. Ltd., [2012 (4) TMI 450 - BOMBAY HIGH COURT ] wherein held the deduction under section 10A has to be given at the stage when the profits and gains of business are computed in the first instance. The Tribunal was right in holding that the deduction under section 10A in respect of the allowable unit under section 10A has to be allowed before setting off brought forwarded losses of a non-section 10A unit - Decided in favour of assessee.
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