TaxTMI 
TaxTMI 
2010 (1) TMI 696
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....referred to as the CIT, ordering fresh assessment by the Assessing Officer, was set aside. Briefly stated the facts of the case are that the assessee/respondent filed return for the assessment year 2000-01. The assessee declared taxable Income of Rs.1,72,980/- after claiming deduction under Section 80IA amounting to Rs.89,74,875/-. It was observed by the Assessing Officer that the assessee is a partnership firm consisting of two partners namely Smt.Bhupinder Kaur and Smt.Manjeet Kaur having 1/2 share each. During the year under consideration, the assessee firm derived income from manufacture and sale of main shaft of watches, latch links for MCBs and weighing scale parts. On sales of Rs.1,33,72,078/-, a gross profit of Rs.1,01,49,12....
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....owever, a perusal of these substantial questions of law shows that the main points on which the appeal has been admitted is in regard to the powers of the CIT under Section 263 of the Act and whether the learned Tribunal was right in law in not giving findings on each of the issues raised by the CIT in its order holding the order of the Assessing Officer as erroneous and prejudicial to the interest of the Revenue. The learned counsel for the Revenue, during the course of arguments, had pointed out that in the order passed by the CIT, it had considered each aspect of the case and had given reasoning also for disagreeing with the assessment made by the Assessing Officer. However, the ITAT, while setting aside the order of the CIT, had not re....
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....r passed therein by the Assessing Officer is erroneous in so far as it is prejudicial to the interests of the revenue, he may, after giving the assessee an opportunity of being heard and after making or causing to be made such inquiry as he deems necessary, pass such order thereon as the circumstances of the case justify, including an order enhancing or modifying the assessment, or canceling the assessment and directing a fresh assessment." To substantiate his submissions, the learned counsel for the appellant had relied upon the following decisions. The decision in M/s The Green World Corporation versus Income Tax officer, Parwanoo and others, 2006(2) Shim.LC 22, was relied upon which was a decision of a Division Bench of t....
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....y and plant used in the business of unit-II. It was held that hence no deduction could have been claimed under Section 80-1 in view of explanation 2 to sub-section (2) of the said provision and the activities of the firm did not amount to manufacturing of any goods or articles for the purpose of claiming tax holiday under Sections 80-1A and 80-1B of the Income Tax Act. Consequently, the Commissioner of Income Tax ordered that only 5% of the total declared net profits of the assessee firm could be said to be its income from the business at Parwanoo, with respect to which deduction under Section 80- 1B of the Income Tax Act could be allowed and that the rest of the amount declared as net profits to the tune of 95% was the income of th....
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....ers in which machinery and plants were installed. Goods were manufactured, furnished and disposed of outside the State, but records were fabricated to show that raw material was received, goods were manufactured and workers were employed in such premises. It is in the light of this ground reality that the factual aspect of the matter needs to be dealt with." Reliance was also placed upon the decision in Malabar Industrial Co.Ltd. versus Commissioner of Income Tax [2000] 243 I.T.R. 83, in which the powers of the Commissioner under Section 263 of the Act as well as the term 'prejudicial to Revenue' were considered and it was held that the order which is erroneous and prejudicial to the Revenue must be read in conjunction with an erron....
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....observed that in view of the manufacturing turn over of over 1.33 crore, the expenditure of Rs.1,04,680/- is considered highly inadequate. The observation was also made in regard to employment of less than 10/20 workers and the assessee firm claimed to have employed 14 persons during the financial year 1999-2000, out of which 3 persons were working exclusively as office staff. Thus, it was concluded that 11 persons could be held to be engaged for manufacturing process and keeping in view of the nature of the manufacturing process, as claimed by the assessee, and its turn over, the expenses were considered very much on the lower side. This reference has been made to show that the CIT had considered every aspect in detail and had come to a co....