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TMI Blog2012 (3) TMI 501X X X X Extracts X X X X X X X X Extracts X X X X ..... and remand the issue to his file with a direction to decide the issues raised therein in accordance with law. X X X X Extracts X X X X X X X X Extracts X X X X ..... ssued a notice u/s 263 of the Income-tax Act asking the assessee to show cause as to why the said assessment orders should not be revised. The assessee filed its detailed written submissions and after considering the same, the CIT held that the order of the AO is erroneous and prejudicial to the interest of the Revenue and, therefore, is liable to be set aside. He directed the AO to make a fresh assessment order and to allow deduction u/s 10A for the two units correctly in accordance with law in the light of the observations in his order u/s 263 of the Income-tax Act. Thereafter the CIT(A) while considering the assessee's appeal against the order u/s 143(3), rejected the assessee's appeal holding that the assessment order u/s 143(3) has become no-est in view of the order passed by the CIT u./s 263 of the Income-tax Act. The assessee is in appeal before us against the order of the CITI, Bangalore u/s 263 of the Income-tax Act and also against the order of the CIT(A), dismissing the assessee's appeal as infructous. 4. As regards the order u/s 263 of the Income-tax Act is concerned, the learned counsel for the assessee submitted that the order passed u/s 143(3) can be revised only if ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on where it is only a question of computation in accordance with relevant articles of a double taxation avoidance agreements and that should be clearly indicated in the order of the assessing authority, whether or not the assessee had given particulars or details of it. It is the duty of the assessing authority to do that and if the assessing authority had failed in that, more so in extending a tax relief to the assessee, the order definitely constitutes an order not merely erroneous but also prejudicial to the interest of the revenue and therefore while the Commissioner was justified in exercising the jurisdiction u/s 263 of the Act, the Tribunal was definitely not justified in interfering with this order of the Commission in its appellate jurisdiction." 5. Thus, according to him, the assessment order cannot be held to be erroneous and cannot be revised u/s 263 of the Income-tax Act. As regards the merits of the direction of the CIT u/s 263 of the Incometax Act is concerned, the learned counsel for the assessee has placed reliance upon the decision of the 'B' Bench of the Tribunal in the case of M/s Manhattan Association (India) Development Centre Pvt. Ltd., in ITA Nos.114 and 11 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ontention of the assessee that sec. 10A is an exemption section. Section 10A is placed in Chapter III of the Act, which deals with incomes which do not form part of total income. Section 10A was initially in the nature in exemption. The provision was substituted w.e.f 1.4.2001 and thereafter in an exemption sec. it was converted into a deduction section. While the loss of a 10A unit was not eligible to be carried forward initially, after the amendment brought about by the Finance Act, 2000 the loss of a sec. 10A unit is eligible to be carried forward and set off against profits of subsequent years. This is in terms of sec. 10A(6) of the I.T Act. The Karnataka High Court in the case of Himatasingike Seide Ltd., 286 ITR 255 stated that the computation of total income has to be in terms of the IT Act. The judgment of the High Court makes it clear that the computation of eligible profits for sec. 10A has to be in accordance with the provisions of the Act and the profit of the undertaking cannot be determined in isolation of the other provisions of the Act. It is therefore held that the provisions of sec. 70 and sec. 72 are applicable in determining the profits of the business for the p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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