COMMISSIONER OF INCOME TAX Vs. ABHISHEK INDUSTRIES LIMITED

JUDGEMENT

(1.) THIS appeal filed by Commissioner of Income Tax-I, Ludhiana under Section 260A of the Income Tax Act, 1961 (for brevity 'IT Act') challenges the order dated 29.04.2011 passed by the Income Tax Appellate Tribunal, Bench 'A', Chandigarh (ITAT).

(2.) THE facts of the case in brief are that Joint Commissioner, Income Tax, Range-I, Ludhiana, the Assessing officer (AO) passed the assessment order dated 28.12.2006 under Section 143(3) of the IT Act in respect of the respondent-assessee for the assessment year 2004-05. The Commissioner of Income Tax (CIT) exercising his revisional powers under Section 263 of IT Act, found the assessment order to be prima-facie erroneous and prejudicial to the interest of revenue as the relief granted under Section 80 IA, was not deducted from the profits and gains of the business before computing relief under Section 80 HHC of the IT Act. The respondent-assessee was, thus, served with a show cause notice dated 18/20.02.2009 under Section 263 of IT Act.

(3.) IT was also found that due to non-application of correct law, deduction under Section 80HHC has been allowed in excess, which has resulted into lesser taxable income and thus the order is prejudicial to the interest of revenue. To this extent the order of AO was set aside and it was directed to compute the deduction under Section 80HHC after giving due opportunity of being heard to the assessee.