TaxTMI 
TaxTMI 
2016 (3) TMI 748
X X X X Extracts X X X X
X X X X Extracts X X X X
....) vide his order dated 28.12.2011 for assessment year 2009-10. Assessee raised the following grounds:- "1.0 Deduction under section 10AA of the Income tax Act, 1961 1.1 The learned Commissioner of Income Tax erred in assessing the quantum of deduction under section 10AA in his order under section 263 passed on March 26, 2014. 1.2 He erred in stating that the appellant was entitled for a deduction of Rs. 8,05,512/- under section 10AA of the Income Tax Act, 1961. 1.3 He erred in law by interpreting that the amended provisions of sub-section (7) of section 10AA were made applicable from assessment year 2010-11 and hence it was not applicable for assessment year 2009-10. He erred in appreciating that a proviso to the sub-section (7) was....
X X X X Extracts X X X X
X X X X Extracts X X X X
....export profit from SEZ unit by considering the total turnover of SEZ unit and export turnover of SEZ unit. The deduction under section 10AA of the Act was duly certified by a qualified chartered accountant in form 56F as prescribed. The working of deduction under section 10AA of the Act is reproduced below:- Total profit of SEZ X export turnover of SEZ = Rs.21,88,235/ Total turnover of SEZ The AO in his assessment order u/s 143(3) of the Act has accepted the claim of the assessee under section 10AA in respect of its unit located at SEZ, Noida. However Ld. CIT found the order of AO is erroneous in so far as it is prejudicial to the interest of Revenue by observing that the assessee has claimed the excessive deduction u/s 10AA o....
X X X X Extracts X X X X
X X X X Extracts X X X X
....lf of Revenue. 3. We have heard rival submissions of both the parties and perused the materials available on record. Ld. AR submitted paper book which is containing pages from 1 to 13. Before us the ld. AR submitted that the total turnover/ export turnover and profit arising from the undertaking located at SEZ shall alone be considered for the working of the deduction under section 10AA(7) of the Act. The total turnover of the assessee shall not be taken into account while working out the deduction under section 10AA of the Act. The assessee also submitted that the provisions of section 10AA are also applicable to the assessee for the year under consideration as amended provisions are effective from the assessment year 2006-07 and onwards.....
X X X X Extracts X X X X
X X X X Extracts X X X X
....g a fresh assessment...." The sum and substance of the above reproduced section 263(1) can be summarized in the following points:-: 1) The commissioner may call for an examine the record of any proceeding under the Act; 2) If he considers that the order passed by the AO is (i) Erroneous; and (ii) Is prejudicial to the interest of Revenue; 3) He has to give an opportunity of hearing in this respect to the assessee; and 4) He has to make or cause to make such enquiry as he deems necessary; 5) He may pass such order thereon as the circumstances of the case justify including, (i) An order enhancing or, (ii) Modifying the assessment or (iii) Cancelling the assessment and directing a fresh assessment. Now in the light of ab....
X X X X Extracts X X X X
X X X X Extracts X X X X
....pted profits in the case of units in Special Economic Zones (SEZs) 6.1 Section 10AA was inserted in the Income-tax Act by the Special Economic Zone Act, 2005 with effect from 10.2.2006. Through the Finance (No.2) Act, 2009, section 10AA(7) of the Income-tax Act, 1961 was amended and the words "by the undertaking" were substituted for "by the assessee" with effect from assessment year 2010-11 and subsequent assessment years. This was done as the existing formula was perceived to be discriminatory in so far as those assessees are concerned who have multiple units in both the SEZ and the domestic tariff area (DTA) vis-à-vis those assessees who were having units in only the SEZ. With a view to removing the anomaly, the provisions of s....