TaxTMI 
TaxTMI 
2019 (10) TMI 714
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.... Trade Policy 2009 to 2014 for misuse of LOP and other deeds due to unprecedented economic offence committed by the unit in the state of willful and intentional Act to defraud the Government. He, therefore, confronted the same to the assessee as to why the claim of Rs. 46,22,783/- should not be disallowed. Rejecting the various explanation given by the assessee the Assessing Officer made disallowance of Rs. 46,22,783/- by observing as under :- "lt is clear from above submission dated 13.03.2014 that assessee company also is not interested to recognize itself as an EOU and has also not claimed deduction u/s 10B for A.Y. 2012-13 onwards. The assessee company has not referred the reasons for not claiming deduction u/s 10B from A.Y. 2012-13 onwards. In absence of any reasons, it is obvious that assessee have committed the offences which are highlighted and enumerated in the Development Commissioner, Noida order dated 27.09.2013. In the light of above discussion and following offences explained/referred in the order dated 27.09.2013, the submission made by the assessee company regarding the claim for deduction u/s 10B is not acceptable. a) Claiming drawback by conce....
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....2,783 of deduction claimed u/s 10B of the Income Tax Act or not? 5.3 At the outset, the facts of the case are that the assessee company is engaged in the business of manufacturer and exporter of readymade garments. During the year, the assessee company has claimed deduction of Rs. 46,22,783/- u/s 10B of the Income Tax Act. During the year, the AO received copy of the order dated 27.09.2013 of Sh. Jayant Mishra, Development Commissioner, NOIDA Special Economic Zone, Noida. Vide this order, a penalty of Rs. 40,00,000/- was imposed under the provisions of section 11 of the FTDR Act, 1992 read with para 6.6.1(c) of Foreign Trade policy for misusing of letter of permission (LOP) by the assessee unit. The AO has reproduced the gist of the order in the assessment order itself. 5.4 The AO observed in the assessment order that the Development Commissioner in its order dated 27.09.2013 has emphasized that the assessee company has not followed all the terms and conditions laid down under EOU status to claim tax exemption notification. The conclusion drawn by Development Commissioner in its order dated 27.09.2013 is re-produced as under for ready reference:- ....
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.... claim of deduction u/s 10B from A.Y. 2012-13 onwards. The AO laid emphasis on the fact that the assessee claimed drawback by concealing its status as EOU to Customs Authorities w.e.f. 03.10.2007 I and also did not comply with the mandatory requirements of Customs bond and warehousing license under Section 58 and 65 of the Customs Act 1962. 5.7 The AO also held that the unit failed in discharge of its obligations as an EOU after the issuance of the Letter of Permission (LOP) as enumerated under Chapter 6 of the Foreign Trade Policy (FTP) read with Chapter 6 of the Foreign Trade Policy (FTP) read with Chapter 6 of Handbook of Procedure (HBP). It is also held by the AO that the assessee company failed to submit and satisfy the competent authority for achievement of positive Net Foreign Exchange in terms of provisions of FTP. Accordingly, the AO disallowed the claim of exemption u/s 10B of the Act. During the appellate proceedings, the appellant relied upon the decision of Hon'ble Delhi High Court in its own case where the Hon'ble High Court has accepted the claim of exemption u/s 10B of the Act. The appellant reiterated that its claim is in conformity with the approv....
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....ference in total disregard to past history of the case and rule of consistency. 2(i) That the Ld. CIT(A) has erred in placing reliance on provisional order of Development Commissioner which is in respect of provisions of Customs Act and has no relevance or bearing to the issue of claim of deduction u/s 10B of the Income Tax Act, 1961. (ii) That the order of Development Commissioner having been passed without jurisdiction and being under challenge, the Ld. CIT(A) & AO have grossly erred in drawing adverse inference on the basis of same. (iii) That even otherwise, the appellant having complied all the pre-conditions as mandated u/s. 10B of the Act, the disallowance of statutory deduction u/s 10B on extraneous grounds is illegal and not sustainable under the law. 3. That on facts and circumstance of the case, the Id. CIT(A) was not justified in endorsing the finding of the assessing officer and confirming consequential disallowance of claim of deduction to the extent of Rs. 42,80,369/- u/s 10B in respect of duty draw back even though same is part of eligible profit for the purpose of deduction u/s. 10B as held by Hon'ble High Court in assessee's own....
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....ssessing Officer and the CIT(A) are not justified in placing reliance on the same. 7. So far as the second issue is concerned i.e. the denial of claim of deduction u/s. 10B on duty drawback to the extent of Rs. 42,80,369/- on the ground that the duty drawback is not derived from export of article or thing and no foreign exchange can be brought into India by earning said income. He submitted that the issue stands squarely covered in favour of the assessee by the decision of Hon'ble Delhi High Court in assessee's own case for A.Y.2008-09 and 2009-10 which has been followed by the Tribunal for A. Y. 2010-11. Therefore, the second issue being a covered one in favour of the assessee, the order of the CIT(A) should be set aside on this issue and the ground raised by the assessee should be allowed. 8. The Ld. DR on the other hand heavily relied on the order of the AO and the CIT(A). He submitted that the assessee has claimed the deduction concealing their status as EOU to customs authorities w.e.f. 03.10.2007 and has not complied with the mandatory requirements of customs and warehousing license. The assessee has claimed 100% exemption u/s. 10B of the IT Act as an EOU from the date ....