Tribunal dismisses appeal for 2003-04 based on ITAT decision, allowing appeals for 2001-02 and 2002-03.

The Tribunal allowed the appeals for assessment years 2001-02 and 2002-03, stating that the matter fell outside the jurisdiction of the Commissioner u/s.263 as it had been previously adjudicated. However, the appeal for assessment year 2003-04 was dismissed based on a prior decision by ITAT, Bangalore Bench, resulting in the overall dismissal of the assessee's appeal.

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Issues involved:
The judgment involves appeals filed by the assessee for assessment years 2001-02, 2002-03, and 2003-04, challenging orders passed by the Commissioner of Income-tax u/s.263 of the IT Act, 1961.

Assessment years 2001-02 and 2002-03:
The appeals contested the Commissioner's decision that the assessment orders were erroneous and prejudicial to revenue u/s.263, arguing that preconditions for invoking power under section 263 were not met, and the findings were legally flawed. The Commissioner's reliance on post-assessment records was also challenged. The issue of setting off unabsorbed depreciation before deduction u/s.10A was a key point of contention.

Assessment year 2003-04:
The appeal disputed the Commissioner's directive to set off unabsorbed depreciation before allowing deduction u/s.10A. The assessee contended that the Commissioner erred in this decision.

Section 263 Appeals:
The assessee objected to the Commissioner's jurisdiction under section 263, claiming the matter was subjudice before the Commissioner of Income-tax(A). The Commissioner's revision order highlighted the necessity of setting off unabsorbed depreciation against business income before allowing exemption u/s.10A, emphasizing the revenue implications of not doing so. The judgment clarified that the issue of unabsorbed depreciation set-off was distinct from the question of deduction u/s.10A, which had already been adjudicated by the Commissioner of Income-tax(A).

Outcome:
The Tribunal allowed the appeals for assessment years 2001-02 and 2002-03, citing that the matter had been adjudicated by the Commissioner of Income-tax(A) and was outside the jurisdiction of the Commissioner u/s.263. However, the appeal for assessment year 2003-04 was dismissed based on a previous decision by ITAT, Bangalore Bench. The overall result was the dismissal of the appeal filed by the assessee.

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