TMI Blog2018 (12) TMI 810X X X X Extracts X X X X X X X X Extracts X X X X ..... 8 clarifying the agreement between Netafim ACS & India Ltd. as discussed above. It is a fact that this clarification by way of letter was not available at the time of original assessment proceedings u/s 143(3) of the Act. The clarification being additional document filed by the ld. Counsel for the assessee needs to be examined/verified by the AO in order to establish the veracity of the same. Therefore, we are restoring back the issue to the file of the AO for the limited purpose of carrying out the verification/ examination of the letter filed by the assessee written by the State Govt. of Andhra Pradesh and adjudicate the issue afresh in accordance to the provisions of law. - Decided in favour of assessee for statistical purposes. - I.T.A. No.864/Ahd/2016 - - - Dated:- 1-8-2018 - Shri Mahavir Prasad, Judicial Member And Shri Waseem Ahmed, Accountant Member For the Appellant : Shri Dhinal Shah, Rohit Pansari, A.R. For the Respondent : Shri Surendra Kumar, CIT-DR ORDER PER WASEEM AHMED, ACCOUNTANT MEMBER: The captioned appeal has been filed at the instance of the assessee against the appellate order of the Principal Commissioner of Income Tax- 2, Vadod ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sued on 30-08-2012. The assessment was framed u/s 143(3) r.w.s. 92CA of the Act after making the disallowance of the depreciation of ₹ 16,89,148/- vide order dated 18-03-2015. Subsequently, the ld. CIT on verification of the assessment records of the assessee observed that it had claimed deduction u/s 80-IA-4 (i) of the Act on account of the development of irrigation product for ₹ 9,21,95,170/- only. The ld. CIT was of the view that the assessee was not entitled to such a deduction. Therefore, the income of the assessee has been underassessed by the AO. Accordingly, the CIT issued notice u/s 263 of the Act dated 10-12-2015. As per the ld. CIT there has to be an agreement between Indian Company and with the Central Government or a State Government or legal authority or any other statutory body for claiming deduction u/s 80IA- 4(i) of the Act. However, in the instant case, the agreement has been signed between Netafin ACS and India Ltd. having registered office and headquarters in Israel and Vadodara Gujarat and the governor of Andhra Pradesh, at Hyderabad, represented by the Commissioner and Director of Horticulture, Government of Andhra Pradesh. Thus, it is clear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te was fast approaching. This is evident of the assessment order that the AO did not made any reference in this regard in his assessment order on show cause notice issued by him. 7. Similar issue was involved in Assessee's case for A.Y. 2010-11 where in the A.O. in order u/s. 143(3) of the Act for A.Y. 2010-11 had disallowed deduction u/s. 80IA(4) of the Act. However, the A.C. failed to considerate issue of disallowance u/s. 80IA4(i) of the Act, for A.Y. 2011-12 in the above circumstances, the assessment order passed by the Assessing Officer is considered erroneous in so far as prejudicial to the interest of revenue. 8. Given the facts of the case as said herein above, specially wherein the AO allowed the claim so put forward by assessee without examining its allowability, the assessment order so passed was erroneous in so fas as if is prejudicial to the interest of revenue. Reliance is places on the decision in the case of Corn Energy India (P) Ltd vs. Director of Income-tax (International Taxation, Chennai [2013] 30 taxmann.com 332 [Chennai - Trib,; Where Assessing Officer allowed assessees claim for deduction under section 8I-IB and simply mentioned in assessm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... above and white doing so ensure that reasonable and sufficient opportunity of being heard in the matter is afforded to the assessee. The assessment is set-aside for the limited purpose only. Being aggrieved by order of ld. CIT assessee is in appeal before us. The ld. AR before us filed a paper book which is running from pages 1 to 74 and submitted that the assessee is a subsidiary of Netafim Ltd. As such, there is no company with the name of Netafim ACS and India Ltd., which was mentioned in the agreement with State Government of Andhra Pradesh. In fact, the name of Netafim ACS and India Ltd. was mentioned in agreement with the Govt. of Andhra Pradesh inadvertently. The ld. AR for the assessee also submitted that the Director of the assessee company signed the agreement. The ld. AR further submitted that the assessee company issued all the invoices to the State Government of Andhra Pradesh. The ld. AR drew our attention on Pages 67 to 70 of the Paper Book, where the sample copies of the invoices were placed. The Ld. AR further submitted that the performance certificate was issued by the State Govt. of Hyderabad in the name of the assessee company. The ld. AR in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Netafim Irrigation India Pvt Ltd , A.P, Guntur 268-270,271-B, GIDC,. Manjusar, Savli, District: Vadodara-391 775 Gujarat Lr.No.APMlP/Tech/96/2018, Dt:06.06.2018 Sir, Sub: APMIP-Confirmation of name of M/s Netafim Irrigation India Pvt Ltd in the Agreement Dt:03.11.2003-reg. Ref: Lr. No Nil Dt: 16.01.2018 of M/s Netafim Irrigation India Pvt Ltd. ***** With reference to subject above, it is to inform that the agreement dated 3rd November 2003 has been entered in to with M/s Netafim ACS India Ltd with the Commissioner and Director of Horticulture, Government of Andhra Pradesh for implementation of Andhra Pradesh Micro Irrigation Project. Further it is noticed that the said agreement has been signed by Mr. Zvi Feler, Managing Director, M/s Netafim Irrigation India Pvt Ltd as authorized signatory mentioned in the reference. Hence it is to confirm that the firm, M/s Netafim Irrigation India Pvt Ltd Head Quarters at Vadodara, Gujarat is the MI Company participating in APMIP. Further while making ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he AO was proposed to be held as erroneous on account of following defects: i. Without the application of mind. ii. Without examining of assessment records properly. iii. Without applying the correct law as per the provision of Act. However, on perusal of the order passed u/s 263 of the Act, we note that it has been held that the order of the AO is erroneous in so far prejudicial to the interest of revenue on the ground that it was made without proper verification, investigation, and examination. Thus, the limited issue before us arises for our adjudication whether the AO has examined the relevant facts as discussed above during the assessment proceedings u/s 143(3) of the Act in the given facts and circumstances. On perusal of the submission filed by the assessee during the assessment proceedings as discussed above, we note that the necessary details were duly filed before the AO during the assessment proceedings. The copy of the agreement between Netafim ACS India Ltd. and State Government of Andhra Pradesh was also filed before the AO during the assessment proceedings, which is placed on Page 39 to 56 of the paper book. In our considered view, once the AO has ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e he has a different opinion in the matter. It is only in cases of lack of inquiry . We also find support and guidance from the judgment of Hon ble Supreme Court in the case of CIT vs. Reliance Communication Ltd. reported in 76 taxmann.com 226. The relevant extract of the head-note is reproduced below: Section 68, read with section 263, of the Income-tax Act, 1961 - Cash credits (FCCBs) - Assessee raised funds by way of FCCBs during year under consideration - Assessing Officer completed assessment accepting income declared by assessee - Commissioner noticed that no investigation was carried out by Assessing Officer to establish name and address, genuineness and creditworthiness of actual subscribers to FCCBs in terms of section 68 - He thus passed a revisional order setting aside assessment - Tribunal noted that Assessing Officer had made detailed enquiries about aforesaid aspect and mere fact that he did not make any reference to said issue in assessment order, could not make said order erroneous and prejudicial to interest of revenues - High Court by impugned order held that finding recorded by Tribunal being a finding of fact, no substantial question of law arose there ..... 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