COMMISSIONER OF INCOME TAX Vs. TEKNIKA COMPONENTS

JUDGEMENT

(1.) This is an appeal filed by the appellant against the order of the Income Tax Appellate Tribunal, Chandigarh Bench(A), Chandigarh, hereinafter referred to as the ITAT, dated 13.12.2005, vide which the appeal filed by the assessee was allowed and the order passed by the Commissioner of Income Tax, hereinafter referred to as the CIT, ordering fresh assessment by the Assessing Officer, was set aside.

(2.) Briefly stated the facts of the case are that the assessee/respondent filed return for the assessment year 2000-01. The assessee declared taxable Income of Rs.1,72,980/-after claiming deduction under Section 80IA amounting to Rs.89,74,875/-. It was observed by the Assessing Officer that the assessee is a partnership firm consisting of two partners namely Smt. Bhupinder Kaur and Smt. Manjeet Kaur having 1/2 share each. During the year under consideration, the assessee firm derived income from manufacture and sale of main shaft of watches, latch links for MCBs and weighing scale parts. On sales of Rs.1,33,72,078/-, a gross profit of Rs.1,01,49,123/-giving rate of 75.8% has been declared by the assessee. Since the assessee firm was held eligible for deduction under Section 80IA, the rate declared by it at such a margin was examined by the Assessing Officer. A sum of Rs.1,72,985/- was credited on account of interest in the profit and loss account, which was not held to be eligible for deduction under Section 80IA and return submitted by the assessee was accepted, except the above deduction which was disallowed on account of interest.

(3.) The CIT exercising its revisional jurisdiction under Section 263 of the Income Tax Act passed a detailed order on 30.3.2005 setting aside the order of the Assessing Officer, dated 30.10.2002, to be erroneous and in so far it was prejudicial to the interest of the Revenue. The Assessing Officer was directed to frame fresh assessment after giving reasonable opportunity of being heard to the assessee after bringing on record all necessary evidence and also taking into consideration all the facts and circumstances of the case, as discussed in the order.