TaxTMI 
TaxTMI 
2016 (9) TMI 1045
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....le or thing for the purpose of see: 32(1)(iia) which provides for additional depreciation". 3. The learned CIT has failed to fully appreciate the submissions made before him in this regard. He was not justified in holding that the order of the learned AO allowing depreciation to the extent of Rs. 1,65,04,000/- is erroneous insofar as it is prejudicial to the interest of revenue within the meaning of section 263 of the Income-tax Act, 1961. 4. The learned CIT was not justified in holding that considering profit of Rs. 1,15,91,571/- for computation of income u/s 10A without enquiries has resulted in error within the meaning of section 263 and that this has also caused prejudice to the revenue. He has erred in setting aside this issue to the file of the AO. He has grossly erred in not considering and not even referring to the binding decisions of the jurisdictional High Court and Tribunal which were relied upon before him in this regard. The-appellant craves leave to add to, to alter or to amend the above Grounds of Appeal." 2. Brief facts of the case are that the return of income showing total income of Rs. 33,429,990/- was filed on 26.9.2009. The return....
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....no. 03 to 05 of the paper book and the same is reproduced below for reference. "Your Honour has first raised the issue of the allowance of additional depreciation of Rs. 1,65,04,000/- on windmill. Your Honour has stated: "However, this "windmill" was not used in any manufacturing activity. Therefore, this does not qualify for additional depreciation". At the outset, Your Honour's kind attention is drawn to section 32(1)(iia) which reads as follows: "in the case of any new machinery or plant (other than ships and aircraft) ,which has been acquired and installed after the 31 st day of March, 2005, by an assessee engaged in the business of manufacture or production of any article or thing ... ". It is submitted that the only requirement of the section is that the assessee should be engaged in the business of manufacture or production of any article or thing. This condition is clearly satisfied by the assessee which is engaged in the manufacture of pigments, HOPE, surfactants, etc. A close reading of the provision brings out that there is no requirement that the windmill should be used in any manufacturing activity. Without prejudice, it....
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....laced upon the decision of the Bombay Bench of the Tribunal in 19 ITR 361, Larsen & Toubro Infotech Ltd. v DCIT which has held that provisions written back qualify for deduction u/s 10A. A copy of the synopsis of this decision is enclosed at pages 24 to 26 of the Paper Book." 5. After referring the aforementioned facts, learned AR submitted that in the show-cause notice learned CIT has mentioned that the assessee had claimed and was allowed depreciation of Rs. 11,05,66,720/- which includes additional depreciation of Rs. 1,65,04,000/- on 'windmill'. However as per learned CIT this windmill was not used in any manufacturing activity and therefore this does not qualify for additional depreciation. In addition it was submitted that the assessee had claimed deduction on profit derived from the unit Lapiz Digital Services of Rs. 4,74,76,455/- out of which profit of Rs. 1,15,91,571/- was not derived from export of articles such as sundry receipts of Rs. 1,08,68,525/- and sundry balance written back was Rs. 7,23,046/-. These receipts are not derived from export of article, things or computer software. Therefore no deduction is allowable on these incomes u/s. 10A of the Act. Whereas, in ....
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....missioner to set out one reason for revising order but actually revise order on some other ground. "Section 263 of the Income Tax Act,1961- Revision of order prejudicial to interest of revenue (Scope of )- Assessment Year 2007-08- whether a revisional order can only be passed on ground on which assessee has been given reasonable opportunity of being hear, and it is not open to Commissioner to set out one reason for revising order but actually revise order on some other ground- Held, yes- Whether, therefore, where Commissioner initiated revisional proceedings proposing to make certain disallowances and addition, he could not pass impugned order under section 263 on ground of lack of proper enquiries made by Assessing Officer in course of assessment - Held, yes. [Para 10] [In favour of assessee]" 3. Vesuvius India Ltd. vs. Commissioner of Income Tax " Section 263 of the Income Tax Act,1961-Revision -Of orders prejudicial to interest of revenue-Assessment Year 2002-03-Whether when revision order is passed on ground other than grounds for which revision proceedings are initiated, same is not sustainable in law-Held, yes-Commissioner invoked his jurisdiction u....
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....ing the enquiries which are prima-facie warranted on the facts and circumstances of this case. It is trite law that lack of enquiry results in error within the meaning of Sec.263 of the I.T. Act,1961. It is a fact that considering profit of Rs. 1,15,91,571/- for computation of income u/s.10A without enquiries has resulted in error within the meaning of section 263 of the I.T. Act,1961. This has also caused prejudice to the revenue inasmuchas it has resulted in granting exemption without enquiries warranted on facts and circumstances of the case. Accordingly, the order the AO in respect of profit of Rs. 1,15,91,571/- is also set aside to the file of the AO. 8. The AO is directed to examine issues which are subject matter of notice u/s.263 and conduct enquiries required on facts and circumstances of the case. Thereafter, the AO is directed to take the decision as per law. In nutshell, the order passed by the AO is set aside to the file of the AO for considering the issues which are subject matter of notice u/s.263 afresh and take decision as per law." From the perusal of both show-cause notice as well as findings recorded by learned CIT while passing the order u/s. 263, w....