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2017 (9) TMI 52 - HC - Income TaxReopening of assessment - entitlement of the Pune unit for deduction under Section 10B - reason to believe - proof of manufacturing activity by Pune unit - Held that:- The Pune unit being an export unit (as held by the Supreme Court in Yokogawa (2016 (12) TMI 881 - SUPREME COURT) is an eligible undertaking and is entitled to the benefit under Section 10B. All the material facts relating to the Pune and Delhi units and their respective businesses, having been filed with the AO, The benefit of deduction is given by the Act to the individual undertaking and resultantly flows to the Assessee there being nothing new, this reason is not tenable for reassessment. The reasons recorded seem to suggest that no sale proceeds are brought to India and that the Assessee is only providing the manufacturing services to its AEs and receiving the charges on a cost plus basis. This is not correct as per the record. The Assessee’s Pune unit is a 100 % export oriented unit carrying on manufacturing activities. The AO, during the assessment proceedings, had accepted this position and had assessed the income of the Assessee at ₹ 6,85,24,800/- after allowing the benefit under Section 10B of the Act. There was no reason for the AO to seek re-assessment on this ground. It is also held that the activities conducted by the Pune unit constitute `manufacture' and in the subsequent year, on a similar set of facts, the issue of benefit under Section 10B having attained finality, the impugned order deserves to be quashed. Accordingly, notice dated 25th March, 2014 issued under Section 148 of the Act is quashed and the order dated 11th June, 2014 passed by the Respondent, disposing of the objections of the Assessee for AY 2007-08, is set aside. - Decided in favour of assessee.
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