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2018 (11) TMI 1053 - AT - Income TaxRevision u/s 263 - issue of deduction u/s 10A - Special provision in respect of newly established undertakings in free trade zone, etc. - Held that:- Deduction u/s 10A(1A) is allowable notwithstanding anything contained in subsection (1) of section 10A. The fourth proviso being relevant to subsection (1), it was not applicable in case of the deductions eligible under subsection 1A of section 10A of the Act. The observation of the CIT that assessee is not entitled for deduction under section 10A for the year under consideration in view of the 4th proviso to subsection (1), is incorrect appreciation of law. In view of the clear provisions, the Assessing Officer was not required to examine applicability of 4th proviso to subsection (1) of section 10A of the Act. Accordingly, the contention of the Ld. CIT that no enquiry has been conducted by the Assessing Officer on the applicability of the 4th proviso, is hereby rejected. Applicability of MAT provisions on adjusted income - Special provisions for payment of tax by certain persons other than a company - Held that:- If the deduction is claimed under chapter VIA or under section 10AA or under section 35D then the adjusted total income would be total income before claim of those deductions and if the regular income tax payable is less than the MAT payable on such adjusted total income, the assessee would be liable to pay MAT. But, in the instant case, the deduction has been claimed by the assessee under section 10A and not under the sections specified above for computing adjusted total income, thus, the provisions of section 115JC are clearly not applicable. In view of the clear and unambiguous provisions of the law, the Ld. Assessing Officer was not required to enquired upon the applicability of section 115JC in the case of the assessee and thus accordingly, we reject the contention of the Ld. CIT that the Assessing Officer has not made any enquiry on this issue. Deduction in respect of the commission expenses disallowed - Held that:- CIT has observed that copy of the order of the Tribunal of the earlier year was not readily available or was not filed by the counsel of the assessee and therefore the issue required examination by the Assessing Officer. In our opinion, the CIT could have verified the order of the Tribunal and then decided whether the examination was required in the case. Deduction on interest income earned on various FDR - Interest income in the case of the assessee earned on FDR’s with the bank is also eligible for deduction under section 10A. We also find that Assessing Officer asked for the details of the said interest income and assessee has duly filed reply giving detail of the said income. In such facts and circumstances, we are of the opinion that the Assessing Officer has correctly applied the law after carrying out the enquiries, which he ought to have done. Accordingly, we reject the contention of the Ld. CIT that the Assessing Officer has wrongly allowed the deduction on interest income earned on various FDR. We are of the opinion that finding of the CIT that the AO ought to have done enquiries on the four issues is not correct and thus action of the Ld. CIT for holding the order of the Assessing Officer as erroneous insofar as prejudicial to the interest of the Revenue, cannot be sustained. Accordingly, we cancel the order of the Ld. CIT(A) passed under section 263 of the Act. - Decided in favour of assessee.
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