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TMI Blog2011 (2) TMI 1382X X X X Extracts X X X X X X X X Extracts X X X X ..... s disclosed total income of ₹ 1,28,790/- after claiming deduction u/s 10A of the Act of ₹ 34,89,448/-. The Assessing Officer has concluded that the assessee was engaged in the business of electronic data transmission (Data Processing) and that assessee s concern is a 100% Export Oriented Unit(EOU) so, he treated him to be eligible for deduction u/s 10A of the Act. The unit is an existing unit which had started operation since 1998. During assessment proceedings, from the records available, it was revealed that the unit had been approved by the Software Technology Park. Government of India as a 100% EOU for computer software on 3.4.2002. The ld. CIT called for the records of this case and issued a show cause notice u/s 263 dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s registered with STPI which were earlier located in Free Trade Zone, and in the case of section 10B they are the units earlier located in Domestic Tariff Area (DTA) later converted as 100% EOU both duly approved by designated authorities. So, according to him, units existing in Free Trade Zone which are subsequently registered with approval of the concerned authorities for being treated as units under STPI scheme would also get benefit of deduction from the year of registration. But the period of eligibility is 10 consecutive years from the year of manufacture/production. It was admitted that the unit was set up in financial year 1999-2000 when it got approval as STPI unit but it does not ipso facto become an undertaking formed by splittin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for deduction U/s.10A is wrong as the date mentioned in the section is only for reckoning of the period of 10 years Tax Holiday Period as has been held by various ITATs in their decisions. CIT has erred in his contention that since the Appellant was on existing Unit since F.Y: 1999-2000 and Plant Machinery of which were being previously used had been transferred to the STP which was approved on 27.03.2002. CIT is wrong in his presumption that according to Sec.10(A)(2)(i)(c) since the unit begins to manufacture or production commencing on or after 01.04.2001, it has to be in SEZ to be eligible for deduction U/S.10A without considering the fact that before and after the STPI Registration the status of the unit continued to remain as S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aring of this appeal, the appellant prays that the Relief as prayed for may be directed to be granted. The Appellant prays that it may be allowed to add, correct or modify delete or withdraw any of the grounds either before or at the time of hearing of the Appeal. 4. We have heard both sides in detail. We have also perused carefully the entire evidence available on record. It is trite that an order can be revised only and only if twin conditions of error in the order and prejudice caused to the Revenue co-exist. 5. The subject of revision under section 263 has been vastly examined and analyzed by various Courts including that of Hon ble Apex Court. The revisional power conferred on the CIT vide section 263 is of vide amplitu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed in utter ignorance or in violation of any law; or passed without taking into consideration all the relevant facts or by taking into consideration irrelevant facts. The prejudice that it contemplated under section 263 is the prejudice to the Income Tax administration as a whole. The revision has to be done for the purpose of setting right distortions and prejudices caused to the Revenue in the above context. The fundamental principles which emerge from the several cases regarding the powers of the CIT under section 263 may be summarized below: (i) The CIT must record satisfaction that the order of the Assessing Officer is erroneous and prejudicial to the interests of the revenue. Both the conditions must be fulfilled. (ii) Sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ii) The CIT, before exercising his jurisdiction under section 263, must have material on record to arrive at a satisfaction. (ix) If the Assessing Officer has made enquiries during the course of assessment proceedings on the relevant issues and the assessee has given detailed explanation be a letter in writing and the Assessing Officer allowed the claim on being satisfied with the explanation of the assessee, the decision of the Assessing Officer cannot be held to be erroneous simply because in his order he does not make an elaborate discussion in that regard. 6. Adverting to the facts of the case in hand, we notice from the assessment order passed u/s 143(3) that the Assessing Officer has not applied his mind to the legal position ar ..... X X X X Extracts X X X X X X X X Extracts X X X X
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