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TMI Blog2014 (3) TMI 68X X X X Extracts X X X X X X X X Extracts X X X X ..... - made on account of disallowance of exemption u/s.10B of the IT Act on the amount of scrap sales." 1.1 An assessment u/s. 143(3), dated 21.12.2009 was made, wherein it was noted that the assessee firm is a 100% export oriented unit. The assessee is in the business of manufacturing of "Printing Circuit Board". The assessee claimed an exemption u/s. 10B of IT Act. On verification of P & L A/c, it was noted that the assessee had shown "other income" amounting to Rs.1,32,92,850/-, detailed as under: "a) Incremental turnover & connectivity incentive Subsidy from government Rs.49,71,965/- b) Interest income Rs.3,74,922/- c) Sale of scrap Rs.28,62,448/- d) Other income Rs. 25,470/- e) Exchange rate of fluctuation Rs.50,58,045/-" 1.2 Only i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... business of the EOU undertaking eligible for exemption u/s. 10B of the Act. It is submitted it be so held now. 3. The learned CIT(A) has erred in law and on fact in holding that Interest of Rs.3,74,922/- received on deposits kept with banks out of surplus funds generated from the EOU (the only unit of the Appellant), is not part of the business of the EOU undertaking eligible for exemption u/s. 10B of the Act. It is submitted it be so held now." 3.1 Rest of the grounds are either argumentative in nature or consequential in nature. 3.2 At the outset, learned AR, Mr. Sanjay R. Shah has pleaded that the issue of grant of exemption u/s.10B now stood covered by the order of the Special Bench pronounced by ITAT Indore Bench, in the case of Mar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... On the same lines, we hereby direct the Assessing Officer to verify the correctness of the claim and if satisfied, then apply the formula as discussed in this case-law and thereafter allow as per law. Resultantly, these grounds may be treated as allowed but for statistical purposes only. 4.1 The argument of learned AR is that in respect of 100% export oriented undertaking sub section (1) of Section 10B is to be read together with sub section (4) of section 10B. The Special Bench has mentioned that although section 10B(1) refers the profits derived from export oriented undertaking yet the manner of determining such eligible profit has been prescribed in Section 10B(4) of IT Act as per the formula in sub section (4) the entire profit of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decision as cited supra, we deem it proper to restore this issue for both the appeals back to the stage of the AO to be decided in the line of the Special Bench decision. A result of this observation is that the appeals either filed by the Revenue or by the assessee, both are allowed for statistical purpose. C. ITA No.2719/Ahd/2011 (Revenue's Appeal) 7. Revenue has challenged the deletion of penalty levied u/s.271(1)(c) of Rs.49,71,965/- by learned CIT(A), Gandhinagar, vide order dated 17.08.2011. It was held by learned CIT(A) that the issue being debatable in nature, therefore, in a situation when all the relevant facts were placed on record then there was no question of levy of penalty in respect of quantum relief given by learned C ..... X X X X Extracts X X X X X X X X Extracts X X X X
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