TaxTMI 
TaxTMI 
2016 (8) TMI 278
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.... an export oriented undertaking, engaged in the business of manufacture and export of pharmaceuticals. The assessee filed its return of income for the assessment year 2000-01, declaring Nil income. After processing the return and completing the assessment, under Section 143(3), the assessing officer denied the exemption under Section 10B of the Act, in respect of income from sale of scrap and spent solution, and brought the same to tax under the head, other sources. Further, the assessing officer treated the loss from Aurangabad unit, as non-EOU unit, on the ground that the plant and machinery of the above stated unit had been transferred and that the said unit lost the eligibility of been classified under the EOU status and thus, completed....
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.... facts and circumstances of the case, the Tribunal was right in holding that the assessee is eligible for the benefit of Section 10B in respect of profit from sale of scrap and spent solution? (2) Whether on the facts and circumstances of the case, the Tribunal was right in holding that the loss incurred from the Aurangabad unit is includible in the EOU, when it is a separate unit, situated in a different state, and cannot be considered as a single undertaking of the assessee along with the EOU at Alathur?" 6. Though referring to Section 10B of the Act, Mrs.Hema Murali Krishna, learned counsel made submissions that deduction of profits and gains as are derived by a hundred per cent export-oriented undertaking, can be made only f....
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....y and. hence profit on sale of such items is derived from the 100% EOU only. After considering the explanation given by the Assessee regarding the generation of scrap and spent solution, we are of the considered opinion that the scrap and spent solution are part of the manufacturing process and the C.I.T.(Appeals) was justified in directing the Assessing Officer to recompute the income/loss exempt under sec. 10B of the Act. In view of the above, we are of the considered opinion that the order of the first appellate authority is a well reasoned one. Hence, we uphold the finding of the C.I.T.(Appeals) on this issue." 8. On the second substantial question of law, raised in the instant appeal, the Income-Tax Appellate Tribunal, 'B' B....
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....above facts as well as the order of the C.I.T.(Appeals), we are of the considered opinion that the Assessing Officer has not considered the relevant facts and the C.I.T.(Appeals) is correct in holding that the Assessee company has fulfilled the conditions to treat the Aurangabad unit as a part of the EOU operations. It is seen from the records that the unit at Aurangabad had been acquired during January 2000 and it was an existing unit located in the same place. Further, the Assessee applied to the Director, MEPZ and obtained the status of EOU during March. Hence, the Assessing Officer is not correct in treating the loss from Aurangabad unit as a non-EOU and including the loss from such unit in the total loss computed from non-EOU operation....