ITA No.198/Vizag/2013 M/s. Show Tech Stone International Pvt. Ltd., VSKP IN INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER & SHRI G. MANJUNATHA, ACCOUNTANT MEMBER I.T.A.No.198/Vizag/2013 ( Assessment Year: 2009-10) M/s. Show Tech Stone DCIT, Central Circle-2, International Pvt. Ltd., Visakhapatnam Vs. Visakhapatnam [PAN: AAICS 3852M] ( Appellant) ( Respondent) Appellant by : Shri C.V.S. Murthy, AR Respondent by : Shri M.B. Reddy, DR Date of hearing : 23.08.2016 Date of Pronouncement : 07.10.2016 O R D E R PER V. DURGA RAO, Judicial Member: This appeal filed by assessee is directed against order of CIT(Central), Hyderabad dated 20.2.2013 for assessment year 2009- 10. 1 ITA No.198/Vizag/2013 M/s. Show Tech Stone International Pvt. Ltd., VSKP 2. Facts are in brief that assessee company engaged in business of granite exports. assessee filed return of income wherein he has claimed deduction u/s 10A(1A) of Income Tax Act, 1961 (hereinafter called as 'the Act'). A.O. allowed deduction claimed by assessee and completed assessment u/s 143(3) of Act. 3. Ld. Commissioner on verification of records noticed that assessee while filing profit & loss account, he has shown interest income of ` 4,17,610/- on credit side. However, while computing business income for purpose of deduction u/s 10A(1A) of Act, assessee has not reduced interest income of ` 4,17,610/-. Commissioner of opinion that interest income earned by assessee does not partake character of profit and gains derived from export of granite blocks to make it eligible for deduction u/s 10A(1A) of Act. Ld. Commissioner has observed that A.O. while completing assessment, he has not examined interest claim of assessee and allowed deduction. According to Commissioner, order passed by A.O. is erroneous and prejudicial to interest of revenue by issuing show cause notice dated 4.1.2013 and called explanation from assessee. assessee 2 ITA No.198/Vizag/2013 M/s. Show Tech Stone International Pvt. Ltd., VSKP has submitted before CIT(A) that deposit made by assessee in bank for purpose of obtaining various credit facilities and therefore eligible for deduction u/s 10A(1A) of Act. 4. On other hand, Ld. D.R. has submitted that A.O. without verifying records and without application of mind simply allowed deduction claimed by assessee. Therefore, order passed by A.O. is erroneous and prejudicial to interest of revenue. 5. We have heard both parties, perused materials available on record and gone through orders of authorities below. assessee is in business of export of granite, filed return of income and also claimed deduction u/s 10A of Act. While claiming deduction u/s 10A of Act, assessee also included interest income of ` 4,17,610/-. This fact was not examined by A.O. Ld. Commissioner while verifying assessment record found that A.O. has allowed interest income as deduction u/s 10A of Act without verification and therefore, directed A.O. to verify details of interest income and decide in accordance with law. We have gone through assessment order. A.O. has not at all examined whether interest income is eligible for deduction u/s 10A or not. 3 ITA No.198/Vizag/2013 M/s. Show Tech Stone International Pvt. Ltd., VSKP A.O. has allowed claim of assessee without any enquiry/examination. We find that A.O. neither applied mind nor examined details, thus, order passed by A.O. is erroneous and prejudicial to interest of revenue. Therefore, Ld. Commissioner correctly invoked section 263 of Act. In view of above, this appeal filed by assessee is dismissed. above order was pronounced in open court on 7th Oct 16. Sd/- Sd/- (G. MANJUNATHA) (V. DURGA RAO) ACCOUNTANT MEMBER JUDICIAL MEMBER Visakhapatnam: Dated : 7.10.2016 VG/SPS ( Copy of order forwarded to:- 1. Appellant M/s. Show Tech Stone International Pvt. Ltd., D.No.10-01-44/1, 2nd Floor, Opp. IDBI Bank, Siripuram, Visakhapatnam 2. Respondent DCIT, Central Circle-2, Visakhapatnam 3. CIT(Central), Hyderabad 4. CIT(A),Visakhapatnam 5. DR, ITAT, Visakhapatnam 6. Guard file BY ORDER // True Copy // 0 (Sr.Private Secretary) ITAT, VISAKHAPATNAM 4 M/s. Show Tech Stone International Pvt. Ltd. v. DCIT, Central Circle-2, Visakhapatnam