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TMI Blog2014 (1) TMI 73X X X X Extracts X X X X X X X X Extracts X X X X ..... . Commissioner of Income Tax (A) has erred in deleting the disallowance made by the Assessing Officer on account of excess claim of deduction u/s. 10B of the I.T. Act. 3. Since the facts are identical on this issue, we are adjudicating the same with reference to the orders of the authorities below for assessment year 2005-06. 4. In this case in Order u/s. 154 /143(3), the Assessing Officer observed that deduction u/s. 10B of the I.T. Act claimed by the assessee was excessively allowed. As per the Assessing Officer assessee claimed deduction u/s. 10B of the I.T. Act amounting to Rs. 9,37,06,400/- as under:- Profit of undertaking*Export sales Total sales of undertaking 128399316*1005058967 = Rs. 9,37,06,400/- 1377161904 4.1 Assessing O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... For this reason, there was no mistake apparent from record in assessment order u/s. 143(3) dated 27.1.2008 and, therefore, the action of the Assessing Officer to withdraw deduction u/s. 10B u/s. 154 is set aside and the disallowance / addition of Rs. 41,08,977/- is hereby deleted." 6. Against the above Order the Revenue is in appeal before us. 7. We have heard the rival contentions in light of the material produced and precedent relied upon. We find that it is the submission of the assessee that both section 80HHC & 10B deal with computation of deduction of total income on account of export profits. The manner of computation of export profit for the purpose of section 10B is given in section 10B(4) for the exports of 100% export oriented ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed as apparent mistake liable to be rectified u/s. 154 of the I.T. Act. In this regard, reference has been made to the decision of the Hon'ble Supreme Court in T.S. Balram, ITO vs. Vokart Brothers & Others (1971) 82 ITR 50 (SC) that "a mistake apparent on the record must be an obvious and patent mistake and not something which can be established by a long drawn process of reasoning on points on which there may conceivably be two opinions". In the background of the aforesaid discussions and precedents, we do not find any infirmity in the order of the Ld. Commissioner of Income Tax (A), accordingly, we uphold the same. 8. Another issue raised in I.T.A. No. 3541/Del/2012 (A.Y. 2007-08) is that the Ld. Commissioner of Income Tax (A) erred in d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , on unit situated at Bhopal was closed. The Hon'ble Delhi High Court held that the passive user cannot be extended to such limits where the unit did not function for six years and the plea of the assessee that the non user of assets should be treated as temporary non user cannot be accepted. However, the court held that the depreciation was allowable on the basis of concept of block of assets. The head note of the said judgement is reproduced as under:- "Depreciation-User of business-Block of assets vis-a-vis closure of one unit-actual user of asset in a particular year is not necessary- Even passive user qualifies for depreciation - Passive user is to be understood in the sense that the asset is ready ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essential for claiming depreciation even when a particular asset forms part of a "block of assets" cannot be accepted. Therefore, the claim of depreciation was allowable on the basis of the concept of "block of assets". In the appellant's case, even if the closure of the two units is accepted as a permanent closure rejecting appellant's submission to the effect of temporary non-user, in that case too the depreciation cannot be disallowed as the block of assets was in use during the year and the finding of the Assessing Officer that the plant and machinery is separate block of assets not put to use cannot be sustained. The plant and machinery installed at the said two units also form part of block of assets consisting of all th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce of this contention would mean that the assessee is to be directed to maintain the details of each asset separately and that would frustrate the very purpose for which the amendment was brought about. It is also essential to point out that the Revenue is not put to any loss by adopting such method and allowing depreciation on a particular asset, forming part of the block of assets even when that particular asset is not used in the relevant assessment year. Whenever such an asset is sold, it would result in short term capital gain which would be exigible to tax and for this reason, we say that there is no loss to Revenue either." 13. We find that the exposition from the aforesaid case law is directly applicable in this case. Accordingly, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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