TMI Blog2016 (12) TMI 1492X X X X Extracts X X X X X X X X Extracts X X X X ..... an amount of ₹ 5,12,79,987/-. Later on in the scrutiny proceedings u/s 143(3) AO while examining the claim of deduction u/s 10B went through the entire workings of the assessee and found that the assessee is not entitled for deduction u/s 10B of the Act in respect of certain receipts to the tune of ₹ 86,85,103/- which according to him are not attributable to 100% EOU and accordingly made disallowance u/s 10B of the Act thereon to that extent. While completing the assessment u/s 143(3) of the Act, the ld. AO started the computation of the total income from the “assessed income u/s 143(1) of the Act – ₹ 16,46,29,551/-“ and later on proceeded to make regular disallowances in the assessment to that income. Hence it is very ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deduction u/.s 10B of the Act accepted the eligibility of claim of deduction u/s 10B of the Act and finally made disallowance of ₹ 86,85,103/- in respect of certain receipts not attributable to export oriented unit and denied deduction u/s 10B thereon. In other words, the claim of deduction u/s 10B of the Act by the assessee in the sum of ₹ 5,12,79,987/- was disturbed by making the addition in the sum of ₹ 86,85,103/-. But the ld. AO started examining this claim of deduction u/s 10B of the Act by stating in the assessment order as below :- The company has shown exempt income of ₹ 6,25,86,229/- The ld. AO also stated that the assessee had claimed 100% deduction from its profits derived from EOU from the ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ad occurred in the order of the ld. AO warranting the initiation of assessment proceedins u/s 263 of the Act. The ld. CIT however, proceeded to set aside the assessment de novo with a direction to the ld. AO to examine the applicability of section 10B of the Act by reaching to the conclusion that this issue has not been properly examined by the ld. AO. Aggrieved, the assessee is in appeal before us on the following grounds :- 1. That on the facts and in the circumstances of the case, the assessment made by the learned DCIT neither erroneous nor prejudicial to the interest of revenue and therefore the learned CIT was not justified in invoking the provisions of Section 263. 2. That the order u/s.263 is bad in law and, therefore, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... remains at ₹ 16,46,29,552/- vide page 18 of the paper book. Based on these documents relied upon by him he argued that there was absolutely no error in the computation of deduction u/s 10B of the Act by the AO and accordingly no revision jurisdiction u/s 263 of the Act could have been invoked by the ld. CIT in the facts and circumstances of the case. He also argued that the ld. CIT had not pointed out as to where the order of the ld. AO is erroneous and without pointing out as to which part of the order is erroneous just giving a blanket direction to the AO to re-examine the claim of deduction u/s 10B of the Act on the ground that proper examination has not been carried out by the AO is totally unwarranted, especially when the ld. AO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t thereon to that extent. While completing the assessment u/s 143(3) of the Act, the ld. AO started the computation of the total income from the assessed income u/s 143(1) of the Act ₹ 16,46,29,551/- and later on proceeded to make regular disallowances in the assessment to that income. Hence it is very clear that the AO had granted deduction only to the extent of ₹ 5,12,79,987/- u/s 10B of the Act. Hence, we are thoroughly convinced that there is no error in the order of the ld. AO warranting revisionary proceedings u/s 263 of the Act in the facts and circumstances of the case. We have no hesitation to quash the revision proceedings u/s 263 of the Act. Accordingly the grounds raised by the assessee are allowed. 6. In the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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