TMI Blog2012 (7) TMI 576X X X X Extracts X X X X X X X X Extracts X X X X ..... - Failure to conduct the said enquiries, makes the assessment order erroneous and prejudicial to the interests of the Revenue - Commissioner rightly exercised his revisionary power under section 263 of the Act - required conditions for exercise of the said power are satisfied - in favour of the Revenue - - - - - Dated:- 20-1-2012 - SANJIV KHANNA, EASWAR R. V., JJ. JUDGMENT After hearing learned counsel for the parties, the following substantial question of law is framed : "Whether the Income-tax Appellate Tribunal was right in setting aside the order of the Commissioner of Income-tax dated February 25, 2010, under section 263 of the Income-tax Act, 1961 ?" 2. With the consent of the parties, the matter is taken up for fin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Z and SEZ units were by the common parties abroad. 6. Accordingly, the Commissioner observed as under : "6. On the third aspect of the net profit rate of 24.8 per cent. at SEZ unit as compared to 4.8 per cent. at non-SEZ unit, an explanation has been given for various major expenses. It has further been stated that since this aspect was also examined by the Assessing Officer while framing the assessment and the addition of Rs. 6,01,765 was made in the assessment order in this respect, the issue cannot be raised in the proceedings under section 263 of the Income-tax Act, 1961, in view of the various judgments quoted in the reply. (However, as may be seen from point (vi) of the notice under section 263, the objection has been raised s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1961, in the case is held to be erroneous and prejudicial to the interests of the Revenue as far as the total claim of commission is made only from the non-SEZ unit accordingly, the assessment order is set aside on the point with specific directions to the Assessing Officer to examine all the export sales of the SEZ and the non-SEZ units and to correlate the link of the same with the party to whom the commission has been paid and also to the parties to whom sales have been made. He is further directed to work out the figure of commission payment relatable to the sales made by the SEZ unit and to reduce the same from the claim of deduction under section 10A of the Income-tax Act, 1961. An opportunity may be given to the assessee to explain t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... portion towards and for exports made by the Chennai unit. Income of the Gurgaon unit is taxable and if the entire commission expense is attributed and debited in the profit and loss account of the Gurgaon unit, it reduces the profits earned from the said unit. Income of the Chennai unit is exempt under section 10A of the Act. The Commissioner rightly observed that the Assessing Officer should have made enquiry and verified whether the aforesaid commission payment was attributable to the orders procured and supplies made by the Chennai unit. 9. We may also notice that it is accepted that the purchases from both units were made by common parties, who had placed orders for supply on the respondent-assessee. 10. In the present case, the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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