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2015 (5) TMI 674 - AT - Income TaxExemption claimed u/s 80-IC denied - REVISION U/S 263 - manufacturing of crushed iodised salt carried on by the appellant as an activity not within the purview of section 80-IC(2)(b) as held by CIT(A) - Held that:- Commissioner of Income-tax in his revisional jurisdiction should only set aside the order and direct the Assessing Officer for making fresh assessment instead of himself passing final orders. In the case under consideration the Commissioner of Income-tax has decided the two issues instead of remitting them back to the file of the Assessing Officer by holding that the assessee was not engaged in the manufacturing/production and that second unit was established by the splitting up of its existing business. He had left no option for the Assessing Officer to decide the issue on the merits. The provisions of section 263 of the Act were incorporated in the Act to revise the orders that were found to be erroneous and prejudicial to the interests of the Revenue. The Commissioner of Income-tax as senior officer had to indicate the omissions/commissions of the Assessing Officer while passing the revisionary orders. But, in the case before us, the Commissioner of Income-tax had taken over the role of the Assessing Officer. In our opinion, direction of the Commissioner of Income-tax was not justified. Besides, by directing the Assessing Officer not to give opportunity of hearing he has violated the basic principles of natural justice. Thus, on both counts the order of the Commissioner of Income-tax cannot be endorsed. Therefore, we hold that the order of the Commissioner of Income-tax passed under section 263 of the Act is invalid Transport subsidy and interest subsidy - non eligible for deduction under section 80-IC - Held that:- In the appellate proceedings the first appellate authority referred to the decision of of Asst. CIT v. Maithan Smelters Ltd. [2008 (1) TMI 424 - ITAT CALCUTTA-A] 307 ITR (AT) 225 (Kolkata) and held that transport and other subsidies granted by the Government to the assessee for promoting economic growth in the North East Region has direct nexus of the normal activities and hence were rightly included in the profit and loss account of the assessee and were entitled for deduction under section 80-IB of the Act. Finally, he held that subsidies were received by the assessee were exempt as per the provisions of section 80-IC of the Act. The issue is squarely covered in favour of the assessee by the decision of the hon'ble jurisdictional High Court delivered in the case of CIT v. Meghalaya Steels Ltd. [2013 (7) TMI 175 - GAUHATI HIGH COURT) - decided in favour of assessee.
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