TaxTMI 
TaxTMI 
2016 (10) TMI 541
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..../263/2014-15/6520-22 dated 26.03.2015. Assessment was framed by DCIT, Central Circle-VIII, Kolkata u/s 143(3) of the Act vide his order dated 22.03.2013. Shri Kaushal Kumar Surana, Ld. Authorized Representative appeared on behalf of assessee and Shri G. Mallikarjuna, Ld. Departmental Representative appeared on behalf of Revenue. 2. At the time of hearing Ld AR of assessee drew our attention that the appeal is barred by limitation for 124 days on the ground that Mr. Asit Rout an employee of the assessee-company had left the employment of the assessee-company on 15.05.2015 and subsequently M/s Surana Agarwal & Co. appointed as new Chartered Accountants and for which the delay has been occurred. Ld. DR has not raised any if the delay of con....
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.... nexus with the business undertaking and therefore these interest income were required to be excluded for the computation of exemption u/s 10AA of the Act. It was also observed by ld. CIT u/s 263 of the Act that the AO has not raised the issue of interest income in connection with the exemption claimed u/s 10AA of the Act. Thus, the ld.CIT issued notice on 22-03-2013 u/s. 263 to the assessee. In response to such notice, the assessee submitted that the assessee is engaged in the business of import of gold and export of jewelleries from its SEZ units. In the course of business, the assessee has to open Letter of Credit for the import of the gold for that they have made fixed deposits and pledged with the bank as margin money. At the same time....
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....R for the assessee filed a paper book containing pages 1-122 and submitted that the assessment order passed u/s. 143(3) of the Act was merged with the order of the ld. CIT(A) ,CC-I, Kolkata vide order dated 12-09- 2014. Therefore, the same order cannot be revised u/s. 263 of the Act. The copy of the ld. CIT(A) order is placed on page 15 to 28 of the paper book. On the other hand, ld. DR submitted that the issue whether the interest income was eligible for the exemption u/s 10AA of the Act was not there before the ld. CIT(A). The issue before the ld. CIT(A) was with regard to the allocation of expenses between the units entitled for the exemption u/s 10AA of the Act and the units not entitled for exemption u/s 10AA of the Act. Therefore the ....
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....reproduced below : "7. In the written submission regarding the apportionment expenses, the assessee has also claimed that interest income from fixed deposit is also to be apportioned among different units as the FD was pledged as lien for obtaining loan." The relevant observation of the AO in his assessment order is reproduced below: "7.2 The mere fact that the deposit made was for purpose of obtaining loan or letters of credit which letters of credit were, in turn, used for the purpose of the business of the Unit did not establish a direct nexus between the interest and the eligible Unit. In view of the above, the assessee's claim of apportionment of interest income from fixed deposit into various units and claim thereof u/s. 10AA....
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....it cannot be said that the interest expenditure debited or the interest income credited to a particular profit and loss account was not on actual basis. Whatever e the amount of loan and fixed deposit appearing in relation to the books of account of the head office or a unit, the same is reflected in the respective balance sheet and similarly the interest expenditure or interest income s reflected in the respective profit and loss account. ..." From the above order of Ld. CIT(A) we find that the issue of "income on FD" has been duly dealt in the order of AO and subsequently by ld. CIT(A). The AO has not accepted the plea of the assessee for allocation of the interest income on FD & interest expenses. This observation of the Assessing Off....
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....es on facts and the Tribunal has properly dealt with it, no substantial question of law arises 2) General Beopar Co (P) Ltd. v. CIT (1987) 31 taxmann 108 (Cal) the head note- Revision-Merger with appellate order-Extent thereof-Where an appeal is preferred against an assessment order passed by ITO, and an order is passed by the appellate authority, the assessment order merges with appellate order in all respects including matters which are merely affirmed by appellate authority-CIT, therefore, has no jurisdiction to revise such orders-Further, once reassessment proceedings are initiated by issuing notice to the assessee the original order of assessment loses its finality and at this stage it is no longer open for revision by CIT-Question ....