9911796707
TMI Blog2019 (2) TMI 57X X X X Extracts X X X X X X X X Extracts X X X X ..... 2002-03. 2.This appeal was admitted on 25.11.2008 on the following Substantial Questions of Law: "1.Whether on the facts and circumstances of the case, the Income Tax Appellate Tribunal was right in setting aside the order of the Commissioner of Income Tax under Section 263, holding that there was no violation of the conditions stipulated under Section 10A(2)(ii) and (iii) in the matter of the assessee's undertaking claiming exemption for the first time under Section 10A for the assessment year 2000-2001? 2. Whether on the facts and circumstances of the case, the Income Tax Appellate Tribunal was right in setting aside the order of the Commissioner of Income Tax without observing that the assessment order and the appellate order of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 100% Export Oriented Unit. Permission was granted and the Unit came into existence from 31.03.2000 as an Export Oriented Unit. For the assessment year 2001-02, the assessee showed net profit and claimed exemption under Section 10B of the Act, in respect of the 100% Export Oriented Unit. The claim was rejected by the Assessing Officer and the Tribunal. On appeal to this Court, the appeal filed by the assessee was allowed and it was held that the assessee was entitled to the exemption in respect of 100% Export Oriented Unit. The finding rendered in the said decision reads as follows: "15.On the question as to whether by the grant of EOU status, there was formation of new business by a transfer, this Court considered the said issue in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere was no specific prohibition either express or inference to an industrial unit formed by transfer of entire business. This Court pointed out that the transfer was not that of plant and machinery alone but of sale of whole business unit to the transferee company which was only of export of articles or things. In this regard, this Court referred to the decision reported in [2012] 343 ITR 397 (CIT v. SONATA SOFTWARE LIMITED), which in turn referred to the decision of the Supreme Court reported in [1997] 107 ITR 195 (TEXTILE MACHINERY CORPORATION LIMITED v. CIT, wherein, it was held that where a running business was transferred lock, stock and barrel by one assessee to another assessee, the principle of reconstruction, splitting up and tra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ause (iii) of sub-section (2) of Section 10B of the Income Tax Act. 22.In fact, the Board itself has clarified the position in the circular issued by it in Circular No.1 of 2005 dated 06.01.2005.17. The Department of Revenue (Central Board of Direct Taxes) clarified the question as to whether an undertaking set up in Domestic Tariff Area, which is subsequently approved as 100% EOU by the Board appointed by the Central Government in exercise of powers conferred under section 14 of the Industries (Development and Regulation) Act, 1951, is eligible for deduction under Section 10B of the Income-tax Act. On the representation received from various quarters, the Board clarified as follows: "The matter has been examined and it is hereby clarif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssing Officer, while completing the assessment under Section 143(3) of the Act, vide order dated 31.03.2005, did not consider this aspect and in the regular appeal before the CITA, the matter was not taken into consideration. Therefore, the Commissioner of Income Tax Act (Appeals) was justified in invoking the power under Section 263 of the Act. 8.This very issue was considered by the Division Bench of the High Court of Gujarat in the case of Commissioner of Income Tax Vs. Nirma Chemicals Works (P.) Ltd., [2009] 182 Taxman 183 (Gujarat), wherein an identical contention was raised by the Revenue stating that the power under Section 263 of the Act could be exercised. The Court rejected the contention on the following lines: "22.The conten ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the Assessing Officer. Every loss of revenue as a consequence of an order of the Assessing Officer cannot be treated as prejudicial to the interests of the Revenue. For example, when an Income-tax Officer adopted one of the courses permissible in law and it has resulted in loss of Revenue; or where two views are possible and the Income-tax Officer has taken one view with which the Commissioner does not agree, it cannot be treated as an erroneous order prejudicial to the interests of the Revenue, unless the view taken by the Income-tax Officer is unsustainable in law." 9.In the case of Principal Commissioner of Income Tax Vs. H.Nagaraja [2018] 94 taxmann.com 464 (Karnataka), the assessee contended that there was no scope for the Revisiona ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
