TMI Blog2008 (9) TMI 499X X X X Extracts X X X X X X X X Extracts X X X X ..... he order passed by Commissioner of Income-tax under section 263 of the Income-tax Act, 1961. Therefore, answer the question of law raised in this appeal in favour of the assessee and against the Revenue. The above appeal, therefore, stands dismissed. - 147 of 2002 - - - Dated:- 19-9-2008 - RADHAKRISHNAN S. DR. , KATHAWALA S. J. JJ JUDGMENT The judgment of the court was delivered by 1 . S. J. Kathawalla J . The above appeal is filed by the Revenue impugning the order dated August 24, 2001, passed by the Income-tax Appellate Tribunal, Mumbai Bench in I. T. A. No. 2536/Mum/1999 filed by the assessee for the assessment year 199596. 2. The above appeal was admitted by this court on August 11, 2004 on the following substantial que ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anding as on March 31, 1995. The Assessing Officer has further recorded that the copies of the audit report in Form No. 3CD, audit report in Form No. 10CCAC and working of deduction under section 80HHC have been filed along with the return of income. As the sales and purchases were supported, books of account audited, statutory audit reports in Form Nos. 3CA, 3CD and 10CCAC had been filed, the book results were accepted. After discussion the Assessing Officer computed the total income whereunder the net profit pertaining to the export business of the assessee was computed at Rs. 65,07,090 and the net profit pertaining to local business of the assessee was computed at Rs. 3,69,491 and the assessee was allowed deduction under section 80HHC of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s were available for deduction, he would differ with the same due to the above statutory provision. The Commissioner of Income-tax has, therefore, held that since the Assessing Officer has not followed the above provision of law in the order under section 143(3) dated March 31, 1996 while allowing the deduction under section 80HHC and as deduction allowed is higher than what is allowable, the order passed by the Assessing Officer is erroneous in so far as it is prejudicial to the interest of the Revenue. The Commissioner of Income-tax , therefore, recalculated the deductions under section 80HHC and held that the assessee is eligible for deduction under section 80HHC to the extent of Rs. 41,91,131 as against Rs. 65,07,090 allowed by the Asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relied upon by the assessee the condition precedent for invoking jurisdiction under section 263 did not exist and the order of the Commissioner of Income-tax was quashed. (vi) Being aggrieved by the order of the Appellate Tribunal dated August 24, 2001 the above appeal was filed by the Revenue which was admitted on August 11, 2004 on the substantial question of law set out in paragraph 2 above. 4. The advocate appearing for the Revenue conceded before us that the view taken by the Assessing Officer was a possible view. However, he contended that the Assessing Officer has not given any reasons for allowing deduction to the assessee under section 80HHC in respect of the entire net profit of Rs. 65,07,090 pertaining the export business of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssed by the Income-tax Officer was erroneous in so far as it is prejudicial to the interest of the Revenue. It must be an order which is not in accordance with law or which has been passed by the Income-tax Officer without making any inquiry in undue haste. This court has in the said decision also set out that the Income-tax Officer in that case had made the inquiries in regard to the nature of the expenses incurred by the assessee. The assessee had given a detailed explanation in that regard by a letter in writing. Evidently the claim was allowed by the Income-tax Officer on being satisfied with the explanation of the assessee. It was held by this court that such a decision of the Income-tax Officer cannot be held to be "erroneous" simply ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pplied his mind while granting deduction to the assessee under section 80HHC as regards net profit earned by the assessee pertaining to its export business. In our view, the Tribunal is correct in its view that the view taken by the Assessing Officer was a possible view and that the condition precedent for invoking jurisdiction under section 263 by the Commissioner of Income-tax did not exist. 7. In view of the above, we hold that the Income-tax Appellate Tribunal was justified in upsetting the order passed by Commissioner of Income-tax under section 263 of the Income-tax Act, 1961. We, therefore, answer the question of law raised in this appeal in favour of the assessee and against the Revenue. The above appeal, therefore, stands dismiss ..... X X X X Extracts X X X X X X X X Extracts X X X X
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