TMI Blog2012 (1) TMI 226X X X X Extracts X X X X X X X X Extracts X X X X ..... claiming deduction under s. 10B of the Act to the tune of ₹ 1,43,89,613. The assessment was completed under s. 143(3) on 30th Dec., 2008 at nil income. 2.2 On examination of the case records of the assessee, the learned CIT noted that there are certain omissions, mistakes, irregularities, shortcomings etc. besides non-verification of certain facts and lack of inquiry whereas the facts warranted proper and in-depth investigation and inquiry. Thereafter, the assessee was issued show-cause notice dt. 19th Feb., 2010 that as to why action under s. 263 of the Act be not initiated. In the show-cause notice, the learned CIT noted that while allowing deduction under s. 10B various points were not considered by the AO and neither any in-de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... found that the AO was not justified in allowing claim of deduction under s. 10B as all the three conditions were not satisfied. The learned CIT also observed that the existing infrastructure has been taken over and put to use by the assessee. The two conditions (ii) and (iii) of s. 10B(2) were not fulfilled. Accordingly, it was held that the AO failed to examine thoroughly these issues and held that deduction allowed under s. 10B was allowed without examination and, therefore, held that order of the AO was erroneous and prejudicial to the interest of the Revenue. Accordingly, he set aside the order of the AO and directed the AO to pass a fresh order after examining the issue in the light of his observation in his order. 3. The learned c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the asst. yr. 2005-06. Therefore, in view of the above facts and reasons also, the issue is covered by the decision of the Tribunal now. It was also submitted that for the asst. yr. 2004-05, deduction claimed by the assessee was allowed by the ITO himself while passing assessment order under s. 143(3) of the Act. It was further explained that in fact, the assessee has filed the petition under s. 144A before the Jt. CIT in which it was requested that the assessee is engaged in the business of manufacture/production and export of handicraft articles of artistic value, and assessee is 100 per cent EOU and is claiming deduction under s. 10B of the Act for the last many years. It was further submitted that deduction under s. 10B for the asst. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taking into consideration the order of the CIT(A) who allowed the claim of the assessee and then only passed order under s. 143(3) on 30th Dec., 2008. Accordingly, it was submitted that neither there was any lack of inquiry nor the order of the AO can be said to be erroneous and prejudicial to the interest of the Revenue. It was further mentioned that it is not necessary that the assessment should be made in elaborate manner but the same should be made after making inquiry. The AO has already made detailed inquiry and then only has allowed the deduction to the assessee while passing order under s. 143(3) of the Act. Reliance was also placed on the various case laws mentioned in the written submissions. List of judgments is also placed on r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relevant materials available on record along with the case laws cited by the assessee, we found that the order of the learned CIT is liable to be quashed. The learned CIT himself in his order is admitting that a detailed questionnaire dt. 8th Aug., 2008 was issued by the AO to the assessee to file the details in the light of assessment order passed for the asst. yr. 2005-06, wherein deduction claimed under s. 10B was denied. From this fact alone, it establishes that the AO has made inquiry. Various details were filed by the assessee. The AO was examining those details and assessee was in apprehension that the AO is going to disallow the claim of the assessee in spite of the order of the learned CIT(A), who allowed claim of deduction under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee with Jt. CIT, then comments of the AO to Jt. CIT, then letter of the Jt. CIT to the AO and then order of the learned CIT(A) for the asst. yr. 2005-06 by which deduction under s. 10B was allowed, were considered by the AO and then only these findings were given and claim of the assessee was accepted. Therefore, in no way, it can be said that the AO has not made any inquiry. The Hon'ble Bombay High Court in the case of CIT vs. Gabrial India Ltd. (1993) 114 CTR (Bom) 81: (1993) 203 ITR 108(Bom) has held that it is not necessary that the order should be elaborate but the same should be after making proper inquiry. The AO has already made proper inquiry as mentioned above. Therefore, if the order of the AO is precise and in sum ..... X X X X Extracts X X X X X X X X Extracts X X X X
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