Tribunal overturns CIT's order under IT Act, supports AO decision

The Tribunal quashed the CIT's order under section 263 of the IT Act, finding that the Assessing Officer had conducted a detailed inquiry despite lack of elaboration in the order. The Tribunal upheld the AO's order, setting aside the CIT's order, considering the Assessee's submissions, Joint CIT's directions, and CIT(A)'s previous order. The Tribunal also took into account the previous year's Tribunal order supporting the AO's decision. As a result, the Assessee's appeal was allowed, restoring the AO's original order.

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Issues involved: Appeal against order of CIT-II, Jodhpur u/s 263 of IT Act, 1961 for asst. yr. 2008-09 (sic'2006-07).

Details of the Judgment:

Issue 1: CIT's order under s. 263 of IT Act
The CIT observed omissions and lack of inquiry in allowing deduction u/s 10B. Show-cause notice issued to assessee. CIT found AO's order erroneous and prejudicial to Revenue's interest. CIT set aside AO's order directing fresh examination.

Issue 2: Assessee's arguments
Assessee's counsel argued that AO conducted detailed inquiry before allowing deduction u/s 10B. Previous year's order by CIT(A) upheld by Tribunal. Assessee's claim for deduction under s. 10B for previous years was allowed.

Issue 3: Department's stance
CIT-Departmental Representative supported CIT's order, stating AO's lack of inquiry and non-compliance with Jt. CIT's directions. Department did not accept Tribunal's order for previous year.

Judgment
Tribunal found CIT's order liable to be quashed. AO conducted detailed inquiry despite lack of elaboration in order. Assessee's submissions, Jt. CIT's directions, and CIT(A)'s previous order considered by AO. Tribunal upheld AO's order, setting aside CIT's order. Previous year's Tribunal order supporting AO's decision considered. Assessee's appeal allowed, restoring AO's original order.

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