TMI Blog2016 (3) TMI 748X X X X Extracts X X X X X X X X Extracts X X X X ..... ly the order of the ld. CIT cannot be held to be sustainable in law and the same is accordingly set aside. - Decided in favour of assessee - ITA No.1250/Kol /2014 - - - Dated:- 5-2-2016 - Shri N.V. Vasudevan, Judicial Member and Shri Waseem Ahmed, Accountant Member For The Appellant : Shri D.S.Damle, FCA For The Respondent : Shri Sandeep Chaube, CIT-DR ORDER PER Waseem Ahmed, Accountant Member:- This appeal by the assessee is arising out of order of Commissioner of Income Tax, Kolkata-III in appeal No. CIT-III/DC(Ha)-3/Kol/281/u/s263/2013- 14/7264-66 dated 27.03.2014. Assessment was framed by ITO, Ward-8(2), Kolkata u/s 143(3) of the Income Tax Act, 1961 (hereinafter referred to as the Act ) vide his order date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e is a Private limited Company and engaged in the business of manufacturing of electrical and lighting products etc. The assessee has its units situated in Special Economic Zone (SEZ for short) and Domestic Tariff Area (DTA). Assessee s SEZ unit is located at 152, NSEZ, Phase-2, Noida-201305. The necessary details of the turnover of assessee are given below:- 1. Total turnover of assessee (including SEZ DTA Units) Rs.14,38,79,959/- 2. Net profit of the assessee (including SEZ DTA unit) ₹ 64,13,322/- 3. Total turnover of the SEZ unit ₹ 5,29,63,726/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /- (Rs.21,88,235/- - ₹ 8,05,512/-). Accordingly the ld. CIT exercised his power u/s 263 of the Act by issuing a show cause notice. In response to show cause notice the assessee submitted that as per the provisions of section 10AA of the Act, the deduction shall be worked after considering the export turnover and total turnover viz a viz profit of the SEZ undertaking only. However, the Ld. CIT has disregarded the claim of assessee by observing as under that : 1) The AO has failed to interpret the provisions of section 10AA of the Act. 2) The ld. CIT also opined that the amended provisions of section 10AA of the Act are not applicable to the assessee for the current year. Therefore the ld. CIT held that the order passed by A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... On the other hand the ld. DR vehemently supported the view of the ld. CIT. 5. From the aforesaid discussion we find that the ld. CIT treated the order of the AO erroneous in so far as it is prejudicial to the interest of revenue. It is because that the assessee has claimed excessive deduction under section 10AA of the Act by an amount of ₹ 13,82,723.00 and AO has not verified this fact at the time of assessment under section 143(3) of the Act. Therefore the ld. CIT held the order erroneous in so far prejudicial to the interest of Revenue. Now to arrive at the correct conclusion of the case, we deem it necessary to reproduce the relevant provisions of section 263 of the Act. (1) The Commissioner may call for and examine the reco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A(7) of the Act which reads as under : (7) For the purpose of sub-section (1), the profits derived from the export of articles or things or services (including computer software) shall be the amount which bears to the profits of the business of the undertaking, being the Unit, the same proportion as the export turnover in respect of such articles or things or services bears to the total turnover of the business carried don [by the undertaking] [Provided that the provisions of this sub-section [as amended by section 6 of the Finance (No.2) Act, 2009 (33 of 2009)] shall have effect for the assessment year beginning on the 1st day of April, 2006 and subsequent assessment years.] 6. From the above we infer that the total turnover ..... X X X X Extracts X X X X X X X X Extracts X X X X
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