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TMI Blog2010 (1) TMI 876X X X X Extracts X X X X X X X X Extracts X X X X ..... iid) was also not pressed. Hence, ground Nos.1, 2 and 4 are dismissed as not pressed. 2(ii) The assessee has raised ground Nos.3, 5, 6 and 7 as under: "3. On the facts and circumstances of the case and in law, the learned commissioner of Income-tax(Appeals) has erred in confirming the taxability of 'any profit on transfer of DEPB.. 'as specified u/s 28(iiid) whereas the newly inserted clause (iiid) of section 28 is not covered within the definition of income u/s 2(24). 5. Further without prejudice to the above, learned Commissioner of Income-tax (Appeals) has erred in confirming the entire sale proceeds of DEPB entitlements as income u/s 28(iiid), as against actual profit on transfer of DEPB entitlement after reducing the entitlement value of DEPB from the sale proceeds of such DEPB. and has further erred in giving effect of the same while calculating the profits of the business under explanation 'baa' to section 80HHC. 6. Further without prejudice to the above, the assessing officer has erred in considering even the sales tax collected on sale of DEPB amounting to Rs.1,56,199 as profit on transfer of DEPB u/s 28(iiid). 7. Further, without pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are dismissed as not pressed. 3(ii) Ground No.3, 5 and 6 are identical to ground Nos.3, 5 and 7 raised in ITA 3880/Mum/2009. For the reasons given by us in paragraph 2(iii), we set aside the order of the CIT(Appeals) on this issue and direct the AO to re-compute the deduction under sec.80HHC of the Act in accordance with the view taken by the Special Bench in the afore mentioned case. Needless to say the assessee will be given reasonable opportunity of being heard by the AO in the fresh proceedings. 3(iii) In the result, the appeal is treated as partly allowed for statistical purposes. 4. ITA No.3883(Mum)/2009 (A.Y 2001-02): The assessee has raised as many as eight grounds of appeal. Ground No.8 is general in nature and does not require adjudication. 4(i) Ground Nos.1 and 2 relate to reopening of assessment u/s 147 of the Act. The assessee filed return of income on 31-1-2005 declaring income of Rs.60,74,790/- after claiming deduction of Rs.2,43,22,161/- u/s 80HHC of the Act. The assessment was completed u/s 143(3) on 27-2-2004 determining the total income of the assessee at Rs.62,29,681/-. Against the assessment order, assessee preferred appeal befor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... artmental Representative supported the orders of the authorities below and submitted that the AO had reason to believe that there is escapement of income and the assessment was reopened as per the amended provisions of law. As per the change in law, it is the duty of the AO to reopen the assessment where the assessee has claimed excess deduction incorrectly leading to underassessment. 4 (v) We have heard both sides and perused material on record. If the AO has reason to believe that income chargeable to tax has escaped assessment, the AO can reopen the assessment by resorting to the provisions of section 147 of the Act. In the case in hand, subsequent to passing of the assessment order u/s 143(3) on 27-2-2004 the Income-tax Act was amended by Taxation Laws Amendment Act, 2005. Keeping in view this amendment, the AO has come to the conclusion that income has escaped assessment and after duly recording reasons, reopened the assessment u/s 147 of the Act. In our considered opinion, reopening is valid in law as the same is based on certain materials that have come to the possession of the AO subsequent to completion of assessment u/s 143(3) of the Act and this material which is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e AO comes to the conclusion that bank deposits were not kept for the purpose of business, he is directed to disallow the claim by following the decision of the Special Bench of the Tribunal in the case of M/s Topman Exports (ITA No.5769/Mum/2006) and M/s.Kalpataru Colours and Chemicals (ITA 5651/Mum/2006). It is ordered accordingly. 7. Ground No.7 is inter-connected with ground No.6. It is contended that if interest income is treated as income from other sources, 10% of the income may be allowed as indirect cost for earning such interest. This ground of appeal is dismissed in view of direction given with regard to ground No.6. If the AO comes to conclusion that the interest income from FDRs is income from other sources, the alternative ground raised by the assessee may be considered as per law. 8. In the result, the appeal is treated as partly allowed. 9. ITA No.3884(Mum)/2009 (A.Y 2002-03): The assessee has raised as many as eight grounds of appeal. Ground No.8 is general in nature and does not require adjudication. 9(i) Ground No.1 relates to reopening of assessment u/s 147 of the Act. At the time of hearing, learned counsel for assessee did not p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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