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2016 (11) TMI 1552 - AT - Income TaxReopening of assessment - assessment beyond the period of 4 years - Held that:- In the present case, as we have already seen, evidence was produced before the AO in the course of the original assessment proceedings u/s 143(3) of the Act and the same was perused by the AO and he had not chosen to draw any conclusion that the amount claimed as deduction by the Assessee was in fact not available to the assessee. In the given circumstances, we are of the view that Explanation 1 cannot also be resorted to by the Revenue. Explanation-1 to Sec.147 cannot be read in a manner so as to override Proviso to Sec.147 of the Act. Initiation of reassessment proceedings u/s 147 of the Act is held to be illegal and consequently, order passed u/s. 147 of the Act is cancelled - Decided in favour of assessee. Treating the interest as income from other source instead of business income thereby disallowance of benefit of Sec. 10B of the Act - Held that:- In the present case the assessee is a 100% EOU and has income from exports. Besides the assessee has also earned income from the interest on the margin money deposited with the bank in order to avail the packing credit facility. There is a direct nexus between interest income and the income of the business of the undertaking. Indeed the interest income does not par take the character of a profit and gains from the export of an article, but it is the income which is derived in the course of the business. In view of the definitions of ‘Income from Profits and Gains’ incorporated in Sub-section (4), the assessee is entitled to the benefit of exemption of the said amount as contemplated u/s. 10B of the Act. Hence the ground raised by the assessee is allowed. Disallowing the exemption u/s. 10B - addition holding tea blending activity as non-manufacturing - Held that:- As decided in assessee's own case [2012 (7) TMI 531 - ITAT KOLKATA] the blending of tea amounts to manufacture or production of tea for the purpose of exemption u/s 10B of the Act.
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