TaxTMI 
TaxTMI 
2012 (3) TMI 501
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....ngaged in the business of technology process outsourcing, filed its return of income for the assessment year 2005-06 on 30.10.2005 declaring NIL income. During the assessment proceedings u/s 143(3) of the Income-tax Act, notice u/s 143(2) was issued calling for various details. The assessee filed the required details and after considering the same, the Assessing Officer observed that the assessee has STP units both at Bangalore and Pune and observed that the assessee has computed profits from the business at Rs. 70,00,353/- and from this profits, the exemption u/s 10A was claimed at Rs. 31,89,260/- and the remaining profit of Rs. 38,11,093/- was set off against the brought forward business loss. The assessee company had filed a letter dated....
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....the income of the assessee. 3. Aggrieved by the same, the assessee preferred an appeal before the CIT(A). During the pendency of the appeal before the CIT(A), the CIT- I, Bangalore perused the records of the assessee and observed that the Assessing Officer has wrongly allowed the deduction claimed by the assessee company u/s 10A by wrongly computing eligible profit in respect of the Bangalore and Pune STPI units for the purpose of sec. 10A without setting off of the unabsorbed deprecation of Rs. 3,32,22,579/- and Rs. 26,94,007/- respectively as required under the law and that this has resulted in excess allowance of deduction u/s 10A of the Income-tax Act. He, therefore, issued a notice u/s 263 of the Income-tax Act asking the assessee to ....
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....rom the assessee and after examining the same has come to the conclusion that the assessee is eligible for deduction u/s 10A after setting off of the brought forward losses only. According to the learned counsel for the assessee once the Assessing Officer has extensively considered the issue and taken a possible view, then his order cannot be said to be erroneous. In support of this contention, the learned counsel for the assessee has placed reliance upon the decision of the Hon'ble Karnataka High Court in the case of CIT Vs. M/s Infosys Technologies Ltd., 588 of 2006 dated 4th Jan, 2012, wherein the Hon'ble High Court has held as under : "We are also not in a position to accept the submission that the materials had been placed befo....
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....r not the assessee had given particulars or details of it. It is the duty of the assessing authority to do that and if the assessing authority had failed in that, more so in extending a tax relief to the assessee, the order definitely constitutes an order not merely erroneous but also prejudicial to the interest of the revenue and therefore while the Commissioner was justified in exercising the jurisdiction u/s 263 of the Act, the Tribunal was definitely not justified in interfering with this order of the Commission in its appellate jurisdiction." 5. Thus, according to him, the assessment order cannot be held to be erroneous and cannot be revised u/s 263 of the Income-tax Act. As regards the merits of the direction of the CIT u/s 263 of th....
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....405, Mumbai 7. Having heard both the parties and having considered the rival contentions, we find that the basic grievance before us is with regard to the validity of the proceedings u/s 263 of the Income-tax Act. As held by the Hon'ble High Court of Karnataka in the case of Infosys Technologies Ltd., (cited Supra), where the assessing authority has considered the issue at length and has taken a possible view, then merely because the said order does not meet the approval of the CIT, it would not become an erroneous order to be revised u/s 263 of the Income-tax Act. In the case before us, the assessing authority has considered the issue at length and at page 2 and 3 of his order, has held as under : "The assessee company has compute....
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....70 and sec. 72 are applicable in determining the profits of the business for the purposes of sec. 10A as far as unabsorbed depreciation is concerned, carry forward and set off are governed by sec. 32(2) and the unabsorbed depreciation assumes the character of current year's depreciation and has to be allowed as a deduction from current year's income. Therefore the claim u/s 10A is allowed from total income of the assessee after setting off the brought forward losses." 8. The above order of the assessing authority clearly shows that he has applied his mind to the facts of the case before him and as to whether the unabsorbed business loss and depreciation are to be reduced from the total turnover before allowing claim of deduction u/s 10A of....