TMI Blog2010 (10) TMI 620X X X X Extracts X X X X X X X X Extracts X X X X ..... t only upon rejection of deduction under section 10A by the Assessing Officer, there was no way the assessee could have raised this claim before the Assessing Officer and file the requisite certificate - issue of admissibility of deduction under section 10A is restored to the file of the Assessing Officer for fresh examination in the light of observations made above, and that (b)the adhock disallowances of expenses are deleted - Appeals are partly allowed - ITA No. 3014/Mum/04, ITA No. 7265/Mum/05 and 3079/Mum/06, ITA No. 4172/Mum/04 - - - Dated:- 29-10-2010 - Pramod Kumar, Asha Vijayraghavan, JJ. S.E. Dastur for the Appellant A.K. Sinha for the Respondent ORDER Pramod Kumar: 1. These four appeals pertain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y was imported by AJPL and the law does not also permit use of machinery by a person other than the person who has imported the same. It was noted that any new business created by the transfer of plant and machinery previously used for any purpose is not eligible for deduction under section 10 A. It was further held that in any event interest on security deposits, in respect of which also deduction under section 10 A was claimed, cannot be treated as business income, that it has to be taxed as income from other sources, and that, for the said reason, it is not entitled to deduction under section 10 A. The Assessing Officer also made adhoc disallowances of conveyance expenses, other expenses, and staff welfare expenses. Aggrieved, assessee c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... should be considered afresh in the light of the fact that the deduction is unit specific, that the deduction in respect of the unit originally owned by AJPL was only availed for eight years before the assessee came to own it, and that the unit was purchased by the assessee as an independent unit. Learned counsel has also taken us through the scheme of the section to demonstrate that the deduction is unit specific and not assessee specific, and has also moved an application seeking admission of additional evidence which seeks to establish the factual elements embedded in his submissions regarding availing of deduction under section 10 A for eight years and other related aspects. It is also submitted that this aspect of the matter has not bee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndependent set, the question of use of old machinery does become redundant. We may, however, clarify that the matter is remitted only to the extent of claiming deduction under section 10 A in respect of the old unit, and not with respect of entire deduction - including the new unit as well. As regards the question of interest being included in profits eligible for deduction under section 10 A, that aspect of the matter is academic at this stage and we, therefore, decline to address ourselves to the same. With these observations, and in the manner indicated above, the issue regarding admissibility of deduction under section 10A is restored to the file of the Assessing Officer. The adhoc disallowances, having been made without any cogent reas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urn but in the course of the assessment proceedings and the ITO failed to consider the same, it was open to the AAC to entertain the claim. In CIT vs. Kanpur Coal Syndicate (1964) 53 ITR 225 (SC), it was held by the Supreme Court that the powers of the CIT(A) sitting in appeal over an assessment were plenary and conterminous with those of the AO and that he can do what the ITO can do and also direct him to do what he has failed to do. In view of these discussions, the CIT(A) indeed had the powers to examine the assessee's claim on merits by virtue of his co-extensive power over the assessment proceedings and also by virtue of s. 250(5). We thus see no infirmity in the action of the CIT(A) in examining the claim of deduction under section 80 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 10A is restored to the file of the Assessing Officer for fresh examination in the light of observations made above, and that (b)the adhock disallowances of expenses are deleted. 9. In the result, assessee's appeal for the assessment year 2002-03 is partly allowed in the terms indicated above. 10. In assessee's appeal for the assessment year 2003-04 (ITA No.3079/Mum/06), the only issue pressed before us is against CIT(A)'s confirming the adhoc disallowance of Rs.50,000 out of staff welfare expenses. Following the view taken by us for the assessment years 2001-02 and 2002-03, we delete the impugned disallowance. The assessee gets relief to that extent. 11. In the result, assessee's appeal for the assessment year 2003-04 (ITA No.30 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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