TaxTMI 
TaxTMI 
TaxTMI 
2010 (11) TMI 108
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....issues involved, facts and circumstances in both the appeals are identical. Therefore, we take up for consideration, ITA No. 583/PN/09 pertaining to assessment year 2004-05. 3. In brief, the grievance of the assessee is that the Commissioner was not justified in invoking the provisions of section 263(1) of the Act, in order to deny the deduction granted by the Assessing Officer of Rs. 48,03,026 u/s 80-IA of the Act, and also holding that the income earned by way of sales tax incentives availed by the assessee amounting to Rs. 29,28,050 is not entitled for deduction u/s 80-IA of the Act. 4. The brief background is that the assessee is engaged in the business of trading of yarn and cloth, generation of electricity, etc. For the assessment y....
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....050 in the form of sales tax benefits cannot be said to have been derived from eligible business and, therefore, the deduction u/s 80-IA of the Act has been wrongly allowed on the same. 5. On both the two aspects, assessee contested the stand of the Commissioner. As per the assessee, the unabsorbed depreciation of the eligible undertaking already stood set-off against the other incomes in the earlier year and, therefore, the same was not required to be notionally carried forward and set off against the profits of the eligible undertaking for the purpose of computing deduction u/s 80-IA of the Act. Furthermore, with respect to the 'initial assessment year', as appearing in section 80-IA(5) of the Act, the assessee contended that the same re....
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.... modify the assessment order dated 26/10/06. 7. Against the aforesaid, the learned counsel for the assessee quite fairly conceded that on the aspect of applicability of section 80-IA(5) of the Act, Pune Bench of the Tribunal in the case of Padmavati Wind Energy (P.) Ltd. (ITA No. 618/PN/2008 order dated 29th October'10) had considered a similar situation, and a copy of the said precedent has been placed on record. According to the learned counsel for the assessee, he has no objection if directions similar to those given by the Tribunal in the case of Padmavati Wind Energy (P.) Ltd. (supra) are given in the present case in order to re-compute the deduction u/s 80-IA of the Act on the aspect of applicability of section 80-IA(5) of the Act. W....
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....section 80-IA(5) of the Act by the Assessing Officer while determining the deduction u/s 80-IA of the Act. In the case of Padmavati Wind Energy (P.) Ltd. (supra) it was observed that no enquiry appeared to have been made by the Assessing Officer with regard to the claim of deduction u/s 80-IA of the Act, and accordingly, the Commissioner was held to have rightly invoked the power vested in him u/s 263 of the Act. In the present case too, we have carefully perused the assessment order dated 26/10/06 and find that applicability of section 80-IA(5) has not been examined by the Assessing Officer at all. In fact, the learned counsel for the assessee has also not led any material to establish that any enquiries in this regard were made by the Ass....
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....issioner deserves to be modified. While upholding the validity of invoking section 263 by the Commissioner, we hereby modify his directions to the Assessing Officer. The Assessing Officer is hereby directed to examine the issue of 'initial assessment order' and the related computation of deduction u/s 80-IA as per the provisions of the Act, after affording a reasonable opportunity of being heard to the assessee. As a result, directions of the Commissioner in para 16 of the impugned order are hereby modified. 10. Insofar as the aspect of section 80-IA benefits on sales tax entitlement is concerned, it is a trite law that u/s 80-IA of the Act, only the income 'derived from' the eligible industrial undertaking is entitled for deduction. The a....