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2019 (4) TMI 1477 - AT - Income TaxReopening of assessment u/s 148 - exemption u/s 10AA claimed - assessment reopened after expiry of 4 years - HELD THAT:- Revenue could not place any material to establish that there is a failure on the part of the assessee to disclose all material facts required for assessment. Therefore, we hold that the AO has wrongly invoked the jurisdiction. Accordingly, we uphold the order of the Ld.CIT(A) and dismiss the appeal of the revenue. Disallowance u/s 10AA without examining the books of accounts - In the original assessment it appears that the assessee had produced the books of accounts and the AO made certain disallowances. No finding was given by the AO in original assessment with regard to non maintenance of separate books of accounts for 10AA unit. In the instant case, the assessee has filed separate trading account for both SEZ and manufacturing unit, P&L account and balance sheet separately. The assessee has stated that it has maintained separate books of account and worked out the Net profit of ₹ 2,93,93,500/-, before reducing the interest earned on bank FDs of ₹ 20,20,444/-,thus, the profit from SEZ unit worked out to ₹ 2,73,73,054/- which was claimed as exemption. The assessee is trading in bauxite which is relating to domestic sales and the SEZ is dealing in Chrome Concentrate, both are different products. From the information filed in the paper book, these are taken separately by the assessee. AO after verifying the books of accounts, instead of working out the actual profit of the SEZ unit, resorted for proportionate disallowance of exemption claimed by the assessee which is highly arbitrary. When the material is placed before the AO, it is for the AO to examine the books and work out the correct amount of profit related to the exempted unit unless there is any defect in the books of account. As per the Trading & Profit & Loss account, the profit derived by the assessee in respect of VSEZ unit which is eligible for deduction u/s 10AA. Therefore, we hold that on merits also, the assessee is entitled for deduction u/s 10AA as allowed originally. - Decided in favour of assessee.
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