TMI Blog2014 (2) TMI 1225X X X X Extracts X X X X X X X X Extracts X X X X ..... ion u/s 263 and the issue on merits is decided in favour of the assessee - ITA No. 3606/Del/2013 - - - Dated:- 10-2-2014 - SHRI R.P. TOLANI AND SHRI J.S. REDDY For the Petitioner : Shri R.K. Malhotra CA For the Respondent : Shri A. Misra CIT (DR) ORDER PER R.P. TOLANI, J.M:: This is assessee s appeal against the order of CIT-VIII, New Delhi dated 29-01-201307 passed u/s 263 of the Income-tax Act, 1961 relating to A.Y. 2008-09. 2. Brief facts are: While calculating the eligible profit u/s 10B of the Income-tax Act, 1961, the assessee includes receipt of ₹ 1,42,32,066/-. The claim of the assessee was accordingly allowed by the A.O. by passing assessment order u/s 143(3) dated 31-12-2010. While making ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of the Hon ble Supreme Court as to whether the deduction claimed and allowed u/s 10B is in accordance with law, after affording reasonable opportunity of being heard to the assessee. 2.3. Aggrieved, assessee is before us. 3. Ld. Counsel for the assessee contends that the issue in question stands settled in favour of assessee as decided on merits by the ITAT Indore Special Bench judgment in the case of Maral Overseas Ltd. Vs. Addl. CIT (ITA nos. 777 999(Ind) of 2004 295 356(Ind) of 2006) dated 28-3- 2012). The Special Bench observed that in the case of Liberty India (supra) the Hon ble Supreme Court has dealt with the provisions of Sec. 80IA of the I.T. Act where the issue under consideration was sec. 80IB. The Special Ben ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rovided under sub-section (4) of section 10B while computing the profits derived by the undertaking from the export. Thus, the decision of the Hon'ble Supreme Court is of no help to the revenue in determining the claim of deduction u/s 10B in respect of export incentives. 78. Section 10B sub-section (1) allows deduction in respect of profits and gains as are derived by a 100% EOU. Section 10B(4) lays down special formula for computing the profits derived by the undertaking from export. The formula is as under :- Profit of the business of the X Total turnover of business Undertaking carried out by the undertaking 79. Thus, sub-section (4) of section 10B stipulated that deduction under that section shall be computed by apporti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Act is a complete code providing the 76 mechanism for computing the profits of the business eligible for deduction u/s 10B of the Act. Once an income forms part of the business of the income of the eligible undertaking of the assessee, the same cannot be excluded from the eligible profits for the purpose of computing deduction u/s 10B of the Act. As per the computation made by the Assessing Officer himself, there is no dispute that both these incomes have been treated by the Assessing Officer as business income. The CBDT Circular No. 564 dated 5th July, 1990 reported in 184 ITR (St.) 137 explained the scope and ambit of section 80HHC and the mode of determination of profits derived by an assessee from the export of goods. I.T.A.T., Spe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the order of CIT should be set aside as the merits stand decided. 4. Ld. DR supported the order of ld. CIT. 5. We have heard rival submissions and gone through the relevant material available on record. In our considered view, since the issue in question stands squarely decided in favour of the assessee by the ITAT Special Bench order in the case of Maral Overseas Ltd. (supra), which has not been disturbed by any superior authority, is binding on us. Respectfully following the same, we hold that on merits the assessee s computation of eligible profit u/s 10B is to be allowed after including the export profits as claimed by the assessee. In view thereof, without going into technicalities of validity of sec. 263 we uphold the action u/s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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