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Issues involved: Reopening of assessment u/s 147/148, Allowability of deduction u/s 10A of the I.T. Act, Change of opinion by Assessing Officer.
Reopening of assessment u/s 147/148: The Assessing Officer (AO) had previously framed the assessment u/s 143(3) after detailed examination of the allowability of deduction u/s 10A. The AO also rectified the quantification of deduction u/s 10A u/s 154. The Tribunal held that the reopening of assessment lacked tangible material and amounted to a change of opinion, citing the judgment of the Hon'ble Delhi High Court. The Tribunal emphasized that the AO cannot reopen assessments based on a mere change of opinion, and there must be a live link between the reasons and the belief formed. Allowability of deduction u/s 10A: The appellant argued that the deduction u/s 10A should be allowed before setting off brought forward losses, emphasizing the distinction between the profit of an eligible unit and the total business income of an assessee. The Tribunal agreed with the appellant's contention, citing various judgments and holding that the deduction u/s 10A falls under Chapter III and should be calculated on a unit-wise basis. The Tribunal found no infirmity in the order of the CIT(A) on this issue. Change of opinion by Assessing Officer: The Tribunal upheld the CIT(A)'s order, stating that the AO had already applied his mind to the issue of deduction u/s 10A during the original assessment and subsequent rectification order u/s 154. The Tribunal concurred with the CIT(A) that the case amounted to a change of opinion and that the AO lacked tangible material for reopening the assessment. The Tribunal dismissed the appeal of the Revenue based on these findings.
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