2023 (2) TMI 1065

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....That the learned C.I.T.-2, Rajkot erred and was not justified in invoking provisions of section 263 of the I.T. Act and set aside the assessment order passed by the assessing officer on the facts and circumstances of the case. 2. That the appellant craves leave and to and/or to add to add/or to substitute to and/or to delete to and/or to amend to all or any of the grounds of appeal upto the hearing of the appeal." 3. The brief facts of the case are that the assessee filed return of income for assessment year 2010-11 disclosing total income of Rs. 16,12,21,007/- on 25-09-2010. The case of the assessee was picked up for scrutiny and the assessment was completed on 28-03-2013 at a total income of Rs. 16,15,40,460/-. The assessee is....

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....inion nor determined whether the new unit is eligible for deduction u/s. 80IC of the Act. Accordingly, since there is evident lack of inquiry by the Assessing Officer, the assessment order was set aside with the following directions:- "17) As discussed above, the order is both erroneous and prejudicial to the interest of revenue, and the same is set aside. The Assessing Officer is directed to conduct a proper inquiry and verification of the facts relating to; i) eligibility of the claim of assessee in respect of profits of Rudrapur unit u/s 80IC and ii) the correct profits of the two units after proper allocation of costs/arm length price of inter unit transactions and iii) Allocation of common expenses t....

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....iance on the observations made by the ld. PCIT in the 263 order. 5. We have heard the rival contentions and perused the material on record. On going through the questionnaire issued by the Assessing Officer dated 14-09-2012, we observe that no specific query had been raised by the Assessing Officer regarding eligibility to the claim of deduction with respect to the Rudrapur unit u/s. 80IC of the Act. We observe that this is the first year of claiming deduction by the assessee with respect to the Rudrapur unit u/s. 80IC of the Act (in the earlier year though the unit was operationalised but it was incurring losses). We have perused the replies filed by the assessee, which have been submitted before us as part of the paper book. On going t....

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....ery was raised by the ld. Assessing Officer by way of an order sheet with respect to claim of deduction u/s. 80IC of the Act with respect to Rudrapur unit. In the light of the above facts, we are of the considered view that since this was the first year of claim of deduction by the assessee with respect to the Rudrapur unit u/s. 80IC of the Act, the Assessing Officer should have enquired into the eligibility of claim of deduction u/s. 80IC of the Act in detail during the course of assessment proceedings. Since this was the first year of claim of deduction, the Assessing Officer should have enquired whether the Rudrapur unit was a new unit or whether it was merely an extension of existing unit, whether the conditions of splitting up or re-co....