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TMI Blog2022 (7) TMI 1003X X X X Extracts X X X X X X X X Extracts X X X X ..... , on the facts and in the circumstances of the case and in law, the ld. CIT(A) was justified in allowing the appeal of the assessee even though the AR of the assessee firm had not produced any documentary evidence in support of its claim of rejection sale during assessment proceedings. 3. On the basis of the facts and circumstances of the case the learned CIT(A) ought to have upheld the order of the Assessing Officer. It is therefore prayed that the order of the CIT(A) maybe set aside and that of the Assessing Officer be restored." 2. Brief facts of the case are that assessee-firm is a partnership-firm engaged in the business of importing, exporting of rough & polishing diamond. During the year under consideration, the assessee has shown its income from manufacturing and exporting of polished diamond. The assessee filed its return of income for assessment year 2011-12 declaring income of Rs.33,890/-. In the computation of income the assessee claimed exemption of Rs.1.748 crores, under section 10B. The return of income was selected for scrutiny. During the assessment, the Assessing Officer noted that the assessee has shown export sales of polished diamond of Rs.8.16 crores and re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m failed to establish that assessee set-up new plant and machinery for producing article for claiming deduction under section 10B in the initial year. The assessing officer also made certain other observation, which leads him to disallow the benefits under section 10B. 3. Aggrieved by the disallowance of exemption under section 10B the assessee filed appeal before the Ld. CIT(A). Before Ld. CIT(A), the assessee filed detailed written submission as recorded in para-6.2 of the order of Ld. CIT(A). In the written submission, assessee submitted that the immediate preceding assessment year, assessee have been allowed deduction claim under section 10B. The action of Assessing Officer in rejecting the claim of exemption under section 10B on the ground that assessee was carrying a business of cutting & polishing of precious and semi-precious stone. Section 10B of the Act was inserted on 01.04.2004, while permission was granted to the assessee by the Competent Authority of KSEZ bears the date on 4-5/12/2003. Thus, it is not justified and that assessee have commenced its business 30.06.2003 i.e. after insertion of above extension under section 10B and has claimed exemption for assessment ye ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Exports. The assessee submitted that during the assessment vide letter dated 24.03.2013, it was categorically submitted that there was no inter-firm transaction in the form of purchase from its sister concern and the Assessing Officer was not able to disprove the contention of the assessee. On the objection of Assessing Officer that assessee's is sharing electricity expenditure from common electricity connection. The assessee submitted that such observation is likely to be ignored as there was one electric connection in the building wherefrom two separate assessee are functioning and electricity expenditure has to be shared by both of them. On the objection of the Assessing Officer that the purchase made from Ambika Industries and A. Royal Company are not accounted in the books of account of assessee and relevant plant and machinery purchased, though the said bills are not appearing in the balance-sheet of the assessee. The assessee explained that as a matter of fact, the bill dated 27.12.2008 for purchase of machinery from Ambica Industries is duly accounted for in the machinery account, in the books of account in the preceding financial year. Similarly, item purchased from A Roya ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purchased of plant and machinery in the earlier assessment order, otherwise the issue was afresh to examine in the scrutiny assessment for assessment year 2010-11. The Assessing Officer has not been able to point out any specific default in fulfilling the condition. 5. The Ld. CIT(A) also noted that once the claim is similar deduction is allowed in the scrutiny assessment, in an initial year, the similar cannot be disallowed without withdrawing or disturbing the similar claim or relief in the earlier year as has been held by the Hon'ble jurisdictional High Court in the case of Saurashtra Cement And Chemicals Industries Ltd. (supra) and Hon'ble jurisdictional High Court held that assessee is eligible for deduction under section 10B. Aggrieved by the order of ld CIT(A) in reversing the action of assessing officer on the claim of exemption under section 10B, the revenue has filed present appeal before the Tribunal. 6. We have heard the submission of Ld. Senior Departmental Representative (Sr. DR) for the Revenue and Ld. Authorized Representative (AR) for the assessee and have also gone through the order of authorities below. Ld. Sr. DR for the Revenue submits that during the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n. The Ld. AR for the assessee further submits that assessee was allowed similar deduction / exemption in preceding assessment year, which has not been disturbed by withdrawal or by revising the order by superior officer or making re-opening of assessment order of preceding. Thus, the ground of appeal raised by Revenue is directly covered by the decision of Hon'ble jurisdictional High Court in the case of Saurashtra Cement And Chemicals Industries Ltd. (supra). 8. We have considered the rival submission of both the parties and gone through the order of lower authorities. We have also deliberated on various case laws. We find that Assessing Officer made the disallowance claimed under section10B mainly by taking view that in the letter of permission granted by Development Commissioner, KSEZ, Gandhidham dated 4- 5.12.2003, wherein the provision intervening the assessee for carrying on cutting and polishing semi-precious stone claimed deduction under section 10B was inserted by Finance Act, 2003 to the effect from 01.04.2004, therefore, the assessee claimed such deduction. The assessee has not applied for extension of validity of letter of permission within a period of three years ..... X X X X Extracts X X X X X X X X Extracts X X X X
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