TaxTMI 
TaxTMI 
2019 (8) TMI 408
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....facts and circumstances of the case, the Appellate Tribunal was right in law in just confirming the order of the Commissioner of Income Tax u/s. 263 without even adverting to the submissions made by the appellant and without rendering any finding to the fact whether duty drawback is entitled to the deduction under 80IB of the Act? 3. Whether on the facts and in the circumstances of the case, the Appellate Tribunal was right in holding that duty drawback receipt cannot be construed as profits derived from industrial undertaking eligible for deduction u/s.80IB? With the consent of the learned counsels on either side, T.C.A.No.764 of 2009 is taken as the lead case since the facts are identical and the substantial questions of law framed for consideration are also identical, a decision in T.C.A.No.764 of 2009 would cover the other cases as well though the assessments are for different years and the Tribunal had rendered two separate orders one dated 31.03.2009 impugned in T.C.A.No.764 of 2009 and the other common order dated 02.02.2009 impugned in the other tax case appeals. 2.We have heard Mr.R.Sivaraman, learned Counsel for the appellants/assessees and Mr.T.R.Senthil Kumar, learn....
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.... 263 of the Act on the ground that the assessment orders passed by the Assessng Officer cannot be stated to be erroneous or prejudicial to the interest of revenue. Therefore, Substantial Questions of law Nos.1 and 2 are taken up together for decision. 5.The assessment in the lead case pertain to the assessment year 2003- 2004. The assessee is engaged in the business of manufacturing and export of hosiery garments, it filed its return of income on 27.11.2003 admitting a total income of Rs. 43,56,130/-. The assessment was completed under Section 143(3) of the Act on 24.03.2006 on a total income of Rs. 61,44,040/-. In the said order, deduction under Section 80IB of the Act was allowed to the tune of Rs. 33,22,896/- being 25% of Rs. 1,32,91,583/- which is income under the head "Profits and gains of business of profession". This income of Rs. 1,32,91,583/- includes duty drawback receipt of Rs. 1,33,44,053/-. The assessment order having been brought to the notice of CIT(A), it was opined that the deduction under Section 80IB of the Act on the duty drawback receipt is not correct and not as per the provisions of the Act and therefore held that the assessment order passed under Section 1....
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....07) 295 282(SC)]. Accordingly, the CIT(A) directed the Assessing Officer to revise the order of assessment and withdraw the deduction allowed under Section 80IB of the Act on the duty drawback. The assessee filed an appeal before the Tribunal reiterating the grounds raised before the CIT(A) in their objections to the notice issued under Section 263 of the Act. The Tribunal after taking note of the decisions which were relied on by the CIT(A) as well as the decision of this Court in the case of M/s.Sakthi Footwear vs. Assistant Commissioner of Income Tax in TC(A).Nos.1066 and 1067 of 2008 dated 06.08.2008 dismissed the appeal filed by the assessee. this is how the assessee is before us by way of these appeals. 8.In Malabar Industrial Co. Ltd. vs. Commissioner of Income Tax [(2000) 109 Taxman 66 (SC)], the Hon'ble Supreme Court held that the phrase "prejudicial to the interest of the revenue" under Section 263 of the Act has to be read in conjunction with the expression "erroneous" order passed by the Assessing Officer. It was pointed out that every loss of revenue as a consequence of an order of the Assessing Officer cannot be treated as prejudicial to the interest of the reve....
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....r of Income Tax vs. India Gelatine and Chemicals Ltd. [(2005) 275 ITR 284(Guj.)] was clearly in favour of the assessee as the said decision was rendered by the High Court of Gujarat on 08.04.2004. It is further submitted that apart from the said decision, there were other decisions of the Tribunals which were in favour of the assessee and therefore, when two views were possible, the assessment order cannot be faulted nor can it be stated to be erroneous or prejudicial to the interest of revenue for invoking the power under Section 263 of the Act. It is further submitted that the decision in Jameel Leathers and Uppers was distinguished by the Tribunal in the case of Assistant Commissioner of Income Tax vs. P.S. Apparels [(2006) 101 TTJ (Chennai) 29 on the ground that the decision did not consider the duty drawback receipts but deals with Section 80J and 80H, wherein the wordings are different. It is further submitted that the decision of the Delhi Tribunal in Deputy Commissioner of Income Tax vs. Eltek SGS (P) LTd. [(2006) 10 SOT 178 (Del)] was in favour of the assessee and this decision was subsequently confirmed by the High Court of Delhi in Commissioner of Income Tax vs. Eltek SG....