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TMI Blog2004 (6) TMI 586X X X X Extracts X X X X X X X X Extracts X X X X ..... des and also perused the relevant material on record. The learned counsel for the assessee has raised elaborate contentions challenging the impugned order of learned CIT passed under section 263. In brief, the arguments raised by him are three fold. Firstly, he has contended that the issue relating to the deduction under section 80HHC having been already decided by learned CIT(A) by his appellate orders passed on 30-9-1992 and 15-11-1994 for the year under consideration, the order passed by the Assessing Officer under section 143(3) had merged with the said appellate orders and the same, therefore, was not available for revision by the learned CIT under section 263. Secondly, he has contended that the issue relating to deduction under secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order under section 263 and since the said order passed by the Assessing Officer was totally silent on this issue, the same was erroneous as well as prejudicial to the interest of the Revenue giving jurisdiction to the learned CIT for revision under section 263. As regards the contention raised by the learned counsel for the assessee on merits of the assessee s claim for deduction under section 80HHC, the learned DR has pointed out that the learned CIT in his order passed under section 263 has not decided this issue on merits and the same having been set aside to the Assessing Officer for deciding the same afresh on merits, the assessee is free to raise his objections in this regard before the Assessing Officer during the course of set asi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e learned CIT(A) accepting the stand of the assessee on this issue. It is pertinent to note here that the issue in respect of which the learned CIT revised the order of the Assessing Officer passed under section 143(3) related to the eligibility of the assessee to claim deduction under section 80HHC when there was no export profit and since this issue was neither considered nor decided on merits by the learned CIT either in his order dated 30-9-1992 or dated 15-11-1994, the order of the Assessing Officer on this issue was not merged with the said appellate orders as specifically provided in clause ( c ) of Explanation to section 263(1). The contention raised by the learned counsel for the assessee in this regard, being devoid of any merit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the purpose of allowing deduction under section 80HHC. 6. In the light of the aforesaid reasons given by the learned CIT to hold the order of the Assessing Officer passed under section 143(3) to be erroneous, it is necessary to ascertain as to whether the issue in question was properly examined by the Assessing Officer or not and whether there was an application of mind by him in accepting the claim of the assessee on this account. In this regard, the learned counsel for the assessee has filed a copy of enquiry letter dated 17-12-1991 issued by the Assessing Officer to the assessee raising, inter alia , the following query on the issue under consideration : "There is no trading surplus on account of sale/purchase of marine product ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... drawn to the Order of CIT(A)VIII in the case of Magnum International Trading Co. Pvt. Ltd. in assessment year 1987-88 where on the same facts of the assessee s case the Hon. CIT(A) has allowed the appeal against the order passed by the ACIT under section 143(3) of the Income-tax Act, 1961. Copy of the CIT(A)VIII order dated 21-7-1992 is enclosed for your consideration." 7. From a perusal of the aforesaid correspondence between the assessee and the Assessing Officer during the course of assessment proceedings, it is quite evident that a specific query was raised by the Assessing Officer on the issue under consideration and in the reply thereto, it was explained on behalf of the assessee referring to the provisions of section 80HHC(3)( b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ttled that section 263 does not visualize a case of substitution of the judgment of the CIT for that of the Assessing Officer who passed the order unless the decision is found to be erroneous. As already discussed, there was no error in the order of the Assessing Officer passed in the present case as alleged by the learned CIT and in the absence of this jurisdictional aspect, the learned CIT, in our opinion, was not justified in assuming jurisdiction under section 263. In that view of the matter, we set aside his impugned order passed under section 263 restoring that of the Assessing Officer passed under section 143(3). 8. As regards the contention raised by the learned counsel for the assessee before us on the merits of the issue relat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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