TMI Blog2015 (8) TMI 1273X X X X Extracts X X X X X X X X Extracts X X X X ..... igation on claim of assessee of deduction under section 80IB at the assessment stage on the above surrendered income as well as on job charges It is well settled law that failure by the Assessing Officer to make enquiry at assessment stage would render his order to be erroneous and prejudicial to the interest of revenue and jurisdiction under section 263 of the Act have been properly exercised by the Ld. Commissioner of Income Tax. Considering the totality of the facts and circumstances, it is clear that Assessing Officer has passed the assessment order without conducting enquiry and investigation and has allowed claim of assessee under section 80IB of the Act without making any enquiry and investigation. Therefore, the order was correctly treated as erroneous and prejudicial to the interest of revenue. The ld. CIT was, therefore, justified in setting aside the assessment order and directing the Assessing Officer to pass the assessment order afresh denovo by giving opportunity of being heard to the assessee. In this view of the matter, no further directions are required to the Ld. Commissioner of Income Tax in the matter as is argued by ld. counsel for the assessee. The appeal o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e course of survey is eligible business income. Perusal of Schedule VII to Profit Loss Account revealed that assessee has declared income of ₹ 6 Crores as business advances written off. Section 80IB of the Act relates to the deduction in respect of profit and gains from certain Industrial Undertaking. It is well settled proposition that incomes eligible for claim of deduction under section 80IB are only such profits and gains of business as could be said to have been derived from such eligible Industrial Undertaking. Reference was made of the judgement of the Hon'ble Supreme Court in the case of Sterling Foods 237 ITR 579 as also Vallore Electric Corporation 227 ITR 557 in which it has been held that direct nexus between the income earned and income qualified for deduction should be established. Hon'ble Punjab Haryana High Court in the case of National Legguard Works Vs CIT in 228 ITR 18 has held that the deduction under section 80HHC of the Act is available on showing fulfillment of the conditions prescribed and that there can be no presumption that surrendered income on account of unexplained stocks represented export income. 4. The Ld. Commissioner of Income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessing Officer was without proper verification of the details and the seized material and no investigations have been done. It was also noted that it is not a case where Assessing Officer has adopted one possible view. The Assessing Officer has summarily failed to take proper cognizance of the seized material and has failed to apply mind to the facts and did not conduct proper enquiry. The order passed by the Assessing Officer was thus, found to be erroneous and prejudicial to the interest of revenue. The Ld. Commissioner of Income Tax, even on merits found that during the course of survey, certain incriminating material was found against assessee on which assessee surrendered ₹ 6 crores. The assessee, later on has been allowed deduction under section 80IB on the surrendered income of ₹ 6 crores. The perusal of the accounts revealed that assessee has declared income of ₹ 6 crores as business advances written off. The Ld. Commissioner of Income Tax found that the additional income of ₹ 6 crore has been credited as business advances forfeited on which deduction under section 80IB of the Act is not permissible because deduction under section 80IB is eligibl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee submitted that assessment order was passed on 29.10.2010 and the order under section 263 has been passed on 20.03.2013. However, the impugned order was dispatched on 04.04.2013 and received by assessee on 06.04.2013. He has, therefore, submitted that revision order is barred by limitation. He has, however, admitted that the last date of passing of the revision order was 31.03.2013. 9. The ld. DR contended that the only requirement of the law was to pass the revision order within two years which is passed by the Ld. Commissioner of Income Tax in this case. There is no requirement to dispatch the order within that period itself. 10. On consideration of the rival submissions, we are of the view this ground of appeal of the assessee has no merit. Section 263 (2) of the Act provides that no order shall be made under sub section (1) after expiry of two years from the end of the financial year in which the order sought to revised was passed. In this case, the assessment order was passed on 29.10.2010 which was sought to be revised. Therefore, after end of the financial year, the order could have been passed upto 31.03.2013, which is also admitted by ld. counsel for the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng on all the subordinate authorities. 13. We have considered rival submissions. It is not in dispute that during the course of survey conducted in the premises of assessee on 24.07.2008, certain incriminating documents were found relating to loan and advances. The assessee surrendered a sum of ₹ 6 crore to cover up these discrepancies. The accounts of the assessee revealed that assessee had declared income of ₹ 6 crore as business advances written off. Hon'ble Punjab Haryana High Court in the case of National Legguard Works (supra) held that the deduction under section 80HHC of the Act is available on showing fulfillment of the conditions prescribed and that there could be no presumption that surrendered income on account of unexplained stocks represented export income. The assessee, however, claimed deduction under section 80IB on income of ₹ 6 crore so surrendered during the course of survey. It is interesting to note that despite it is a case of survey under section 133A conducted against the assessee and finding incriminating material against the assessee during the course of survey, the Assessing Officer has even failed to mention this fact in the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be erroneous and prejudicial to the interest of revenue and jurisdiction under section 263 of the Act have been properly exercised by the Ld. Commissioner of Income Tax. We rely upon decision of the Delhi High Court in the case of Gee Vee Enterprises 99 ITR 375, decision of Gauhati High Court in the case of Tarzen Tea Company Pvt. Ltd. 205 ITR 45 and decision of Madras High Court in the case of K.A. Ramaswani Chettiar 220 ITR 657. The Ld. Commissioner of Income Tax also relied upon several decisions in the impugned order in support of his findings that failure to make enquiry by the Assessing Officer at assessment stage would render the assessment order to be erroneous and prejudicial to the interest of revenue. The decision of the Hon'ble Punjab Haryana High Court in the case of National Legguard Works (supra) squarely apply against the assessee and the failure to consider decision of jurisdictional High Court itself would support the findings of the Ld. Commissioner of Income Tax that the order passed by the Assessing Officer was erroneous and prejudicial to the interest of revenue. 14. Considering the totality of the facts and circumstances, it is clear that Assessi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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