TMI Blog2011 (7) TMI 1161X X X X Extracts X X X X X X X X Extracts X X X X ..... ome on 29.11.2006 declaring a total income of ₹ 1,45,00,885. The return was processed u/s. 143(1) on 29.11.2007. The case has been selected for scrutiny and a notice u/s. 143(2) was issued on 5.10.2007. 3. The Assessing Officer vide his order dated 31.12.2008, made the additions of ₹ 10,69,409 on account of disallowance under section 40(a)(ia) and ₹ 16,67,840 and ₹ 16,67,840 on account of addition u/s. 10B of the Incometax Act, 1961. 4. The CIT-III, Hyderabad by virtue of powers vested in him u/s. 263 of the Income-tax Act, 1961 called for the assessment records of the assessee-company for A.Y. 2006-07 and it was noticed by the CIT that the order u/s. 143(3) dated 31.12. 2008 passed by the Assessing Officer is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 10B is allowed in the previous A.Y. 2005-06, the same cannot be denied in the subsequent year on the basis that the assessee is not a 100% EOU for the reason that necessary ratification approval is not available with the assesseecompany. The assessee relied on the Tribunal decision rendered in the case of ITO v. Regency Creations Ltd. Hence the assessee company is eligible to claim deduction u/s. 10B of the IT Act for the A.Y. 2006-07. 6. However, the CIT-III, Hyderabad held that section 10B of the Act provides for 100% deduction on profits and gains derived by an 100% EOU from export of articles or things for computer software manufactured or produced by it. Explanation 2 to section 10B defines 100% EOU as undertaking which has been ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt extending the benefits of section 10A to the units under STP scheme. The CIT placed reliance on the decision of the ITAT, Hyderabad B Bench in the case of Infotech Enterprises v. JCIT (85 ITD 325) (Hyd). Accordingly, the CIT held that the assessee-company is not entitled for exemption u/s. 10B of the Act. 8. Regarding the contention of the assessee that IMSC jas communicated to the CBDT that in the opinion of the Department of Information and Technology w.e.f. 1.4.1999, the STP scheme is governed by the foreign trade policy and the approvals issued for setting up STP unit by the designated officers of DIT (Jurisdictional Directors, STPI) under delegated powers in terms if the hand-book of procedures meant approval under STP scheme a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fficer to bring the profits to tax. Aggrieved, the assessee is in appeal before the Tribunal. 10. The learned counsel for the assessee submitted the CITIII, Hyderabad erred while passing the order u/s. 263 for the A.Y. 2006-07 wherein the income of the assessee was revised by enhancing the income of the assessee-company which is not correct and not justified. The Assessing Officer has already considered all the information furnished by the assessee-company and completed u/s. 143(3) and once the assessment has been completed u/s. 143(3) the order cannot be revised enhancing the income by making change of opinion u/s. 263 which is not correct and justified. Where there are two views possible and where one view has been considered, the chan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rder of the CIT-III, Hyderabad is erroneous and the same may be quashed. The learned counsel for the assessee relied on the following decisions: a) DCIT v. Bhrigus Software India P. Ltd. (ITA No. 665/Hyd/07, ITAT, Hyd Bench B order dated 30.10.09). b) Prithvi Information Solutions Ltd. v. ITO (ITA No. 225/Hyd/05, ITAT, Hyderabad Bench 'B order dated 12.10.2007). c) Azad Tobacco Factory (P) Ltd. v. CIT Others (1997) (225 ITR 1002) (All.) d) Mayor Co. V. CIT Anr. (2004) (248 ITR 162) (P H). e) Mehra International v. CIT (2004) (273 ITR 8)(All.) f) Bajaj Tempo Ltd. vs. CIT (196 ITR 188) (SC) g) CIT v. South Arcot Soc. (176 ITR 117, 119) (SC) h) CIT vs. UP Co-op. Fed. (176 ITR 435, 441) (SC) i) Broach Soc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ater to the order passed by the Assessing Officer on 6.12.2007. In our opinion, the CIT is not correct in assuming the deduction under section 10 when the department allowed deduction both in the earlier year as well as in the subsequent years for the same unit and also the CIT is not correct in assuming his jurisdiction by following the clarification issued by the CBDT on 9.3.2009 which is not before the Assessing Officer while allowing the deduction under section 10B of the Act. It is only a change of opinion by the CIT. On change of opinion, the CIT cannot assume his jurisdiction under section 263 of the Act. In view of the above, we cancel the order of the CIT under section 263 of the Act and restore that the order of the Assessing Offi ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
