TaxTMI 
TaxTMI 
2012 (9) TMI 549
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Act. Under the facts and circumstances of the case the action of reopening is without jurisdiction and not permissible either in law or on fact. The present proceedings, therefore, are required to be quashed. 2. The ld. CIT(A) has erred in law and on the facts of the case in confirming the action of ld. AO in not appreciating that the entire profit or income has been generated from the export proceedings which is exempt u/s.10B of the Act and accordingly erred in not granting deduction on "Gola" i.e. wastage income u/s.10B of the Act. 3. The ld.CIT(A) has erred in law and on the facts of the case in confirming the action of ld. AO in not granting deduction under section 10B of the Act on DEPB income. 4. Alternati....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Hon'ble Supreme Court decision in the case of Rajesh Jhaveri Stock Brokers Pvt.Ltd. .291 ITR 500 (SC) has opined that an intimation u/s.143(1) could not be treated to be an order of assessment. It was held that there being no assessment u/s.143(3), the question of change of opinion did not arise. The AO had jurisdiction to issue notice u/s.148 for bring to tax income escaping assessment in an intimation u/s.143(1) and did not render the AO powerless to initiate re-assessment proceedings. Respectfully following this decision of Hon'ble Apex Court, this ground of the assessee is hereby dismissed. 3. Apropos to Ground No.2, the issue was in respect of sale of the wastage viz."Gola" out of manufacturing process. The entire sales represented ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n ancillary gain. He has held that the said incentive was not the profit derived by a 100% EOU. The assessee has claimed DEPB benefit as a part of net profit of the business undertaking for the purpose of deduction u/s.10(B) of the IT Act., but according to AO, it should have been treated as "Other Income" of the assessee. AO has cited Liberty India 183 Taxman 349 (SC) and excluded the impugned amount from the profits of the undertaking while computing the deduction u/s.10(B) of the Act. Being aggrieved, the matter was carried before the CIT(A). 5. Before ld.CIT(A), the assessee has relied upon Topman Exports Vs. ITO (2009) 125 TTJ (Mum) (SB) 289 and Shri Ram Honda Power Equipment 289 ITR 475 (Delhi). Alternatively, it was submitted that....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e sub-section (4) of section 10B which provides specific formula for computing the profits derived by the undertaking from export. As per the formula so laid down, the entire profits of the business are to be determined which are further multiplied by the ratio of export turnover to the total turnover of the business. In case of Liberty India(supra), the Hon'ble Supreme Court has dealt with the provisions of section 80-JA of the Act wherein no formula was laid down for computing the profits derived by the undertaking which has specifically been provided under sub-section (4) of section 10B while computing the profits derived by the undertaking from the export. Thus, the decision of the Hon'ble Supreme Court is of no help to the reve....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... to the provisions of section 80HHC inasmuch as both the sections mandates determination of eligible profits as per the formula contained therein. The only difference is that section 80HHC contains a further mandate in terms of Explanation (bad) for exclusion of certain income from the "profits of the business" which is, however, conspicuous by its absence in section 10B. On the basis of the aforesaid distinction, subsection (4) of section 10A/10B of the Act is a complete code providing the mechanism for computing the "profits of the business" eligible for deduction u/s 10B of the Act. Once an income forms part of the business of the income of the eligible undertaking of the assessee, the same cannot be excluded from the eligible profits fo....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... of the Act." 7. As far as the other decisions namely, Topman Exports vs. ITO (2009) 125 TTJ 289 (Mumbai)[SB] and Liberty of India vs. CIT (2009) 317 ITR 218 (SC) are concerned, the same are not pronounced in the context of the provisions of sec.10B, therefore, finally from the side of the appellant only this precedent was cited in respect of ground Nos.3 to 6 for the legal proposition that export incentive is to be allowed in terms of the verdict of Maral Overseas Ltd.(supra). Undisputedly, this decision of the Respected Special Bench dated 28/03/2012 was not available when the assessment was finalized. The Assessing Officer did not have the benefit of this verdict. The Respected Special Bench has given the direction that an assessee is....