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2019 (8) TMI 408 - HC - Income TaxRevision u/s 263 - assessment orders passed by AO stated to be erroneous or prejudicial to the interest of revenue - AO not considered entitlement for deduction under Section 80IB on the duty drawback receipts - HELD THAT:- There is no indication in the assessment order that the Assessing Officer considered the assessee's entitlement for deduction under Section 80IB of the Act on the duty drawback receipts and that he had taken note of the decision in India Gelatin and Chemicals Ltd., P.S. Apparels, Eltek SGS (P) Ltd., Metro Tyres, etc. and granted the benefit. As mentioned earlier, AO had not dealt with this issue while completing the assessment. Therefore, at this juncture, the assessee is precluded from raising a contention that the Assessing Officer adopted one of the two views that were available at the relevant time. Be that as it may, it has to be seen as to whether the CIT(A) was justified in its reasoning while passing an order under Section 263 of the Act and directing the Assessing Officer to withdraw the deduction allowed under Section 80IB of the Act. At the relevant point of time, the decision in Jameel Leathers and Uppers held the field. This decision was clearly against the assessee. It is not the case of the assessee that they distinguished this decision before the Assessing Officer, he had considered the grounds raised by them and then granted the benefit of deduction under Section 80IB of the Act. Therefore, before us the assessee cannot contend that the Assessing Officer took note of the fact that the decision in Jameel Leathers and Uppers was distinguished by the Tribunal in the case of P.S.Apparels. In the absence of any finding to the said effect in the assessment order, we cannot be called upon to infer that the Assessing Officer did so. Major claim for deduction under Section 80IB was relating to the duty drawback receipts. Therefore, the Assessing Officer having not applied his mind to the said issue, it would be too late for the assessee to now contend that the Assessing Officer had adopted the decisions which were in favour of the assessee at the relevant time. In the case of M/s.Sakthi Footwear, this Court held that the mandate of law in Section 80IB of the Act is that unless the source of the profit is the undertaking, the assessee is not eligible to claim deduction and mere commercial connection between the income and the industrial undertaking would not be sufficient. - Decided against assessee.
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