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TMI Blog2019 (4) TMI 1477X X X X Extracts X X X X X X X X Extracts X X X X ..... 8377; 2,93,93,500/-, before reducing the interest earned on bank FDs of ₹ 20,20,444/-,thus, the profit from SEZ unit worked out to ₹ 2,73,73,054/- which was claimed as exemption. The assessee is trading in bauxite which is relating to domestic sales and the SEZ is dealing in Chrome Concentrate, both are different products. From the information filed in the paper book, these are taken separately by the assessee. AO after verifying the books of accounts, instead of working out the actual profit of the SEZ unit, resorted for proportionate disallowance of exemption claimed by the assessee which is highly arbitrary. When the material is placed before the AO, it is for the AO to examine the books and work out the correct amount of profit related to the exempted unit unless there is any defect in the books of account. As per the Trading Profit Loss account, the profit derived by the assessee in respect of VSEZ unit which is eligible for deduction u/s 10AA. Therefore, we hold that on merits also, the assessee is entitled for deduction u/s 10AA as allowed originally. - Decided in favour of assessee. - I.T.A.No.476/Viz/2018, CO No.134/Viz/2018 - - - Dated:- 23-4-2019 - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 377; 20,05,69,300/-. Since profit and loss account was consisting of both the domestic sales as well as the export sales, the AO was under the opinion that the assessee has not maintained the separate books of accounts for export sales pertaining to the unit which was located at Visakhapatnam Special Economic Zone (VSEZ). Hence, viewed that the deduction u/s 10AA has to be allowed on profits, proportionate to the export sales. Therefore, computed the deduction u/s 10AA proportionately to the export turnover and accordingly worked out the profit relatable to the 10AA unit at ₹ 2,07,74,719/- and the same was allowed as exemption. 3. Against the order of the AO, the assessee went on appeal before the CIT(A) and challenged the order of the AO both technically as well as on merits. The Ld.CIT(A) considered the submissions of the Ld.AR and observed that the assessment in this case was originally completed u/s 143(3) of the Act and the notice u/s 148 was issued subsequently after expiry of 4 years from the relevant assessment year. The Ld.CIT(A) found that the assessee had furnished all the details relating to the deduction u/s 10AA during the original assessment proc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rores and the gross profit derived by the assessee was worked out at ₹ 3.06 crores and more specifically profits derived from the undertaking was worked out to ₹ 2,73,73,054/-. The assessee also furnished the consolidated P L account, Balance Sheet before the AO. The assessee claimed the deduction u/s 10AA in the computation of income for an amount of ₹ 2,73,73,054/-. The AO issued notice u/s 142(1) on 17.01.2011 which is enclosed to the paper bookin page nos. 19 to 28. In question No.19, the AO specifically requested the assessee to furnish the details if any with regard to tax free income. In response the assessee has furnished the details stating that the assessee is having a separate processing unit at VSEZ, Visakhapatnam. Separate set of books of documents have been maintained. The profit from the unit has been claimed as exemption u/s 10AA of the Act, since the unit is located at SEZ. Therefore, from the perusal of the information filed by the assessee before the AO in the original assessment proceedings, it is clearly observed that the assessee had furnished the entire details with regard to the deduction u/s 10AA of the Act an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under : Section 14A, read with section 147 of the Income tax Act, 1961 - Expenditure incurred in relation to income not includible in total income (Reopening of assessment) - Assessment year 2009-10 - Assessee flied its return declaring certain taxable income - Assessing Officer completed assessment under section 143(3) - After expiry of tour years from end of relevant year, Assessing Officer sought to reopen assessment on ground that even though assessee had earned certain exempt income under section 10(34), yet no disallowance had been made under section 14A, read with rule SD - It was noted that assessee had disclosed interest expenses in profit and toss account and investment in balance sheet - Assessee had also disclosed exempt income in its return - Whether since there was no failure on part of assessee to disclose all material facts necessary for assessment, assumption of jurisdiction to reopen assessment beyond period of four years was contrary to provisions of section 147 - Held, yes - Whether, therefore, impugned reassessment proceedings deserved to be quashed - Held, yes [Para 6] [In favour of assessee] 6.1. In the instant case, there is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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