ORDER

PER SUCHITRA KAMBLE, JM

This appeal is filed by the assessee against the order dated 25/3/2015 passed by CIT(A)-II, New Delhi for Assessment Year 2011-12.

2. The grounds of appeal are as under:-

“1. That the learned Commissioner of Income Tax (Appeals) has grossly erred in law and on facts by sustaining the partial denial of exemption claimed under section 10AA of the Act at Rs. 30, 58, 708/- as against a sum of Rs. 1, 45, 49, 488/- as claimed by the assessee - appellant.

1.1. That in doing so, the learned Commissioner of Income Tax (Appeals) has overlooked the detailed oral submissions made by the assessee - appellant on whimsical grounds and has further erred in directing the aforesaid issue to the file of learned AO and in doing so, the learned CIT (A) has overlooked the provisions of statute, wherein, the issue at hand should have been decided by learned CIT (A) only and thus, the said direction of learned CIT (A) is misconceived and misplaced in law.

1.2. That in doing so, the learned Commissioner of Income Tax (Appeals) has failed to appreciate the basic fact that appellant company is an approved SEZ unit duly registered under Special Economic Zones Act, 2005, and thus, for all purposes is construed as a SEZ unit located in a territory outside India and as such, all sales made to other units within SEZ zone and also exports made through third parties are deemed to be construed as export sales, eligible to claim exemption under section 10AA of the Act.

1.3. That the learned Commissioner of Income Tax (Appeals) further failed to appreciate the basic fact that provisions of SEZ Act, 2005 overrides the provisions of Income Tax Act and as such, sales made to units located within same SEZ and also through third parties were eligible to claim exemption under section 10AA of the Act and thus, the disallowance so made and sustained is misconceived and misplaced in law and should be deleted, as such.

2. That the learned Commissioner of Income Tax (Appeals) has further erred in law and on facts by sustaining a disallowance of a sum of Rs. 1, 55, 00, 500/- on account of bad debts written off, which disallowance is completely misconceived and misplaced in law and also contrary to material available on record, thus, the same should have been allowed as such.

2.1 That in doing so, the learned Commissioner of Income Tax (Appeals) has arbitrarily brushed aside the submissions and evidences filed by the assessee - appellant and has further failed to appreciate the fact that the said bad debts have actually been written off in books of accounts and income for the same had also been accounted for in previous years and as such, the conditions as envisaged under section 36(l)(vii) of the Act were duly complied by the assessee - appellant and thus, the said claim of bad debt should have been allowed to the assessee - appellant.

2.2. That the learned Commissioner of Income Tax (Appeals) has further erred in law and on facts in relying on the judgment which is totally inapplicable to the facts of the case of the appellant company and also, the disallowance so sustained by learned CIT (A) is based on complete mis - application of the provisions of law and is based on mere suspicion and surmises and should be deleted as such.

3. That the learned Commissioner of Income Tax (Appeals) has erred in law and on facts in sustaining addition in the hands of assessee company, without giving any fair and proper opportunity of being heard to the appellant company, thereby, violating the principles of natural justice.

3. The assessee company is a 100% BOU, situated in SEZ at Noida and availing all the benefits Available to the assessee as per the SEZ Act, 2005. The assessee is engaged in the business of manufacturing of scaffoldings and there export directly. Besides this at the certain point of time the assessee is selling its manufactured product within zones as Zonal sales. The assessee commenced its activity after 1^st April 2005, accordingly he is eligible to a