TMI Blog2013 (7) TMI 1002X X X X Extracts X X X X X X X X Extracts X X X X ..... 42(1) of the Act; to quash the order dated 06.03.2013, Annexure-E disposing of the objections of the petitioners filed on 11.02.2013 and notices of even date 06.03.2013 under Sections 143(2) and 142(1) of the Act, Annexures-E and F and for a writ of mandamus to stay all further proceedings pursuant to the notices, Annexures-E and F. 2. Facts briefly stated are: petitioner is a 100% export oriented unit engaged in manufacture and export of high-fashion designer jeans having its registered office in the State of Karnataka at Bangalore and assessed to tax. 3. For the assessment year 2006-07, petitioner filed a return, and a revised return of income on 22.10.2007 declaring NIL income while the computation of income showed net profit from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rn of income dated 22.10.2007 should be treated as return filed in response to the said notice for the relevant year, in addition to making a request for supply of copy of reasons for initiating reassessment proceedings for the assessment year 2006-07. The first respondent is said to have furnished the reasons in its letter dated 03.01.2013, Annexure-G alleging that the petitioner failed to fulfill the conditions required to claim deduction under Section 10B and hence ineligible for the deductions. According to the first respondent, the business premises used by the petitioner and belonging to Fibres and Fabrics International Private Limited ( FFIPL for short) was one and the same; entire machinery had been shifted from FFIPL to the petiti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtion of the revenue that the decline in business turn over of FFIPL and increase in the business turn over of petitioner-company was an attempt to enjoy the benefits of Section 10B of the Act in order to avoid tax liability of sister concern, not based on facts and evidence, since a new unit can always be started for availing tax benefit and there being no bar under the statute, it is submitted the starting of the new undertaking by the petitioner and making profits could not support the allegation of the Assessing Officer as was confirmed by the CIT(A) in its order. 7. It is the allegation of the petitioner that the first respondent in a cavalier manner without applying his mind to the material on record and not noticing the law laid d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s to the formation of such a belief, calls for interference and places reliance upon the decision of the Division Bench of this Court in the case of The Assistant Commissioner of Income Tax, Investigation Circle, Mangalore vs. Sri. A. Nagappa W.A. No. 928/1991 D.D. 19.03.1992. Learned counsel further places reliance upon the decision of the Apex Court in Ganga Saran and Sons Pvt. Ltd., vs. Income Tax Officers and others 130 ITR Page 1 to submit that the first respondent had no reason to believe that the income of the petitioner had escaped assessment by wrongly claiming deduction under Section 10B; that the belief that is to be entertained by the first respondent ought not to be arbitrary or irrational, but after an examination as to whethe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onstruction of old business when the assets of the old business are transferred substantially to the new undertaking, by placing reliance on the decision of the Apex Court in the case of Textile Machinery Corporation Limited, Calcutta vs. The Commissioner of Income Tax, West Bengal, Calcutta 1977 SCC (2) 368. 12. It is lastly submitted that mere fact that petitioner was getting some job works done from M/s FFIPL by itself and nothing more cannot deprive the petitioner of the benefit of deduction under Section 10B of the Act and places reliance upon the decision of the High Court of Delhi in ITA No.1324/2010 dated 03rd June 2011 in the case of CIT vs. Continental Engines Ltd 338 ITR 290 13. Per Contra, learned Senior Counsel for the re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... benefit of deduction under Section 10B of the Act. 16. Having heard the learned counsel for the parties, perused the pleadings and examined the order, Annexure-B, ex-facie what is patent is that the order suffers from reasons and findings, except for drawing conclusion. 17. It is elsewhere said that recording of reasons is a part of fair procedure since reasons are the harbinger between the mind of maker of the decision in the controversy and the decision or conclusion arrived at to substitute subjectivity with objectivity. It is true that the order of affirmation of the reasons need not be by extracting the reasons elaborately but even then the arguments or submissions made, points urged have to be dealt with if not elaborately, atle ..... X X X X Extracts X X X X X X X X Extracts X X X X
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