TaxTMI 
TaxTMI 
2018 (12) TMI 810
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....unds: 1. On the facts and circumstances of the case and in law, the learned CIT has erred in holding that the order passed by the learned Deputy Commissioner of Income tax, Circle- 2(1)(2), Vadodara ('learned DCIT) is erroneous as well as prejudicial to the interests of revenue. 2. In as much as: 2.1 On the facts and circumstances of the case and in law, the learned CIT has erred in not appreciating the fact that the learned DCIT had passed the assessment order under section 143(3) r.w.s 92CA after application of mind and after considering the detailed submissions filed by the Appellant and accordingly, the order passed by the learned DCIT is not erroneous. 2.2 On the facts and circumstances of the case and in law, the learned CIT has based on irrelevant considerations, erred in concluding that assessment order is erroneous and prejudicial to the interest of revenue. 2.3 On the facts and circumstances of the case and in law, the order passed by the learned CIT is bad in law and void-ab-initio since the learned CIT failed to consider the submission filed by the Appellant and has wrongly placed reliance on some judicial decisions." 3. The only issue raised by the asses....
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....ot allowing deduction u/s 80IA(4)(i) of the Act. In compliance to it, the assessee filed a return submission vide letter dated 06-01-2016 and further submitted that the dispute of non-signing the agreement between the assessee company and Government of Andhra Pradesh was duly verified by the AO and after that, the deduction was allowed u/s 80IA of the Act. Accordingly, the assessee prayed to the ld. CIT U/s. 263 of the Act not to consider the order as erroneous in so far prejudicial to the interest of the Revenue. However, the ld. CIT disregarded the contention of the assessee and held that the order passed by the AO is erroneous in so far prejudicial to the interest of the Revenue by observing as under: "6. I have considered the facts of the case and submissions of the AR. It has been found that the assessee company has not entered in to agreement with Govt. of Andhra Pradesh as its name was not figured in agreement entered in to with Govt. of Andhra Pradesh as available on records. Since the assessee company did not fulfill the eligibility criteria of claiming deduction u/s. 80IA4(i) of the Act by entering into an agreement with the Centre or State Govt. Furner the registrati....
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....0IA(4A)(i) without discussing the same in the body of assessment order. Further reliance is placed on the decision in the case of Ace Multi Axes Systems Ltd vs. DOT [2013] 35 Taxmann.com 274 (Bangalore-Trib) wherein it was held that the order is erroneous and prejudicial to the interest of revenue where the AO has allowed deduction u/s 80IB even though qualifying condition of section 801B were not satisfied. The order is erroneous and prejudicial to the interest where deduction is allowed without making proper verification or non consideration in its perspective. Reliance is placed on following citations as reported in (2013) 212Taxman 190 (Uttarakhand). (2012) 341 ITR 434 (Gau), (2009) 313 TR AT 182 (Chen.) (SB) as in [2008] ITR AT 7 (Mum. Tri), hence. the assessment to the extant, thus, is erroneous in so far as prejudicial to the interest of revenue as it stood end is cancelled. The AO is directed to reframe the "assessment afresh in view of aforesaid averments." 9. Therefore, it is clear that the assessment order made by the AO u/s. 143(3) r.w.s. 92CA dtd.31.03.2014 was without making proper verifications, investigation and examination, therefore the assessment order so pas....
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....edings framed u/s 143(3) of the Act. In this regard, ld. AR drew our attention on the reply filed before the AO in response to notice u/s 142(1) of the Act vide letter dated 03.03.2014, which is placed on page 21 of the paper book. The relevant extract of the reply reads as under: "1. Show cause notice on Section 80IA With reference to deduction u/s 80IA the deduction was disallowed as there was an issue of name in Agreement. The Agreement was done with Andhra Pradesh Government with the name "Netafim ACS & India Ltd." for the same we had written a letter on 18th March, 2014 justifying our claim under section 80IA. The copy of letter is attached with this letter as Annexure-1" The ld. AR also submitted that the copy of the agreement between Netafim ACS & India Ltd. and State Govt. of Hyderabad was duly filed during the assessment proceedings vide letter dated 20.02.2015. The relevant extract of the copy of the reply is reproduced as under: "1. Agreement Copy of APMIP for Claiming Deduction u/s 80IA Kindly refer to Annexure-1 for Agreement Copy of APMIP for Deduction u/s 80IA." The ld. AR at the time of hearing also filed one letter from the State Govt. of Andhra Pradesh ....
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....ials available on record. The issue in the present case relates to the deduction claimed by the assessee u/s 80IA-4(i) of the Act. As per the ld. CIT the deduction is eligible u/s 80IA-4(i) of the Act to a company registered under any Central or State Act. As per the ld. CIT the agreement was signed between the foreign company and the State Govt. of Andhra Pradesh therefore, the conditions specified u/s 80IA(4)(i) of the Act has been violated. Accordingly, the deduction was not available to the assessee thus, the order passed by the AO allowing the deduction u/s.80IA-4(i) of the Act is erroneous in so far as prejudicial to the interest of the revenue. At this juncture, we find important to reproduce the notice issued u/s 263 of the Act, which reads as under: "8. The AO in the assessment order allowed deduction u/s 80IA4(i) of the Act of Rs. 9,21,95,170/-, without considering the fact that neither the assessee company nor its parent company fulfilled the conditions laid down for claiming deduction u/s 80IA4(i) of the Act as mentioned above, thereby erred in not determining the correct assessable income in the case of assessee company for A.Y. 2011-12. The order so passed is the....
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....the statement of the account filed by the appellant in the absence of any supporting material and without making any inquiry. On these facts the conclusion that the order of the ITO was erroneous was irresistible. Therefore, the High Court had rightly held that the exercise of the jurisdiction by the Commissioner under section 263(1) was justified." We also find support and guidance from the judgment of Hon'ble Delhi High Court in the case of CIT v. Sunbeam Auto Ltd. [2011] 332 ITR 167 /[2010] 189 Taxman 436 (Delhi). In this case it was held that if there is some inquiry by the AO in the original proceedings even if inadequate that cannot clothe the Commissioner with jurisdiction under Section 263 of the Act merely because he can form another opinion. It was emphasized here that the notice and questionnaire given to the assessee which were duly replied, were evidence of full and due inquiry about this expenditure. After satisfying himself that they were in fact outside the purview of TDS provisions. The Court in Sunbeam Auto Ltd. ( supra) held as follows : "Learned counsel for the assessee is right in his submission that one has to keep in mind the distinction between "lack of i....