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2008] 300 ITR 270 [2007] 158 TAXMAN 130 (MP) HIGH COURT OF MADHYA PRADESH, INDORE BENCH Simran Farms Ltd. v. Commissioner of Income-tax-I, Indore A.M. SAPRE AND J.K. MAHESHWARI, JJ. IT APPEAL NO. 25 OF 2004 JUNE 28, 2006 Section 263 of the Income-tax Act, 1961 - Revision - Of orders prejudicial to interests of revenue - Assessee-company was engaged in business of hatching eggs by scientific methods - Assessee claimed deductions under sections 80HHA and 80-I - Assessing Officer allowed claim of assessee under sections 80HHA and 80-I - Subsequent to order of Assessing Officer, Supreme Court, in CIT v. Venkateshwara Hatcheries (P.) Ltd. [1999]237 ITR 174/ 103 Taxman 503, has held that hatching of eggs is not an industrial activity and, hence, those assessees who are engaged in this business are not eligible to claim any benefit under sections 80HHA and 80-I - Subsequently, Commissioner, placing reliance on above decision, issued a notice under section 263 and, rejecting assessee's explanation, set aside order of Assessing Officer - Whether Commissioner (Appeals) was well within his jurisdiction to invoke his revisional powers under section 263 - Held, yes FACTS The assessee-company was engaged in the business of hatching eggs by scientific methods. The assessee, for the assessment year 1996-97, filed return of its income and claimed deductions under sections 80HHA and 80-I. In addition, the assessee also claimed deduction of interest income earned on the loan amount invested in certain concerns treating said income to be an income from industrial undertaking. The Assessing Officer allowed the deduction claimed by the assessee under sections 80HHA and 80-I but disallowed the assessee's claim of interest amount, since same would not be regarded as income derived from business undertaken by an industrial undertaking (assessee). On appeal, the Commissioner (Appeals) allowed the deduction claimed by the assessee on the income earned by way of interest on loan advanced to certain parties by the assessee. Subsequently, the Commissioner, observing that the Assessing Officer committed an error of law in granting benefit of deduction claimed by the assessee under sections…

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