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This appeal of the department is directed against the order passed by Ld. CIT(A) V, New Delhi dated 22.12.2010 relevant to assessment year 2006-07 whereby the following two effective grounds have been raised:

"1. On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in holding revised return as a valid return by in- spite of the fact that it was clearly established by the A.O. that return was revised only after the inquiries conducted by the Investigation wing and not that the assessee discovers any omission or any wrong statement suo moto which is contrary to the provisions of Section 139(5) of the Act.

CIT(A) on appreciation of all the facts including the fact that the return has been revised prior to issue of notice for scrutiny which were on 23rd November, 2007, whereas the revision had taken place on 6th August, 2007, the CIT(A) has held that the revision of return was valid.

Reliance is also placed on the judgement of Hon'ble Punjab & Haryana High Court in the case of CIT Vs Rama Polycot Ltd. 347 ITR 466 wherein it has been held that when a return is revised to withdraw exemption u/s 10B earlier claimed in the original return, the same is required to be accepted as a valid revised return.

All the facts that led to the revision of return has been properly noted by Ld. CIT(A) at pages 4&5 of his order.

It, is therefore prayed by the assessee that the order of the CIT(A) on this issue may be upheld and it may please be held that he assessee had validly revised its return."

6. After having heard both the sides and perusing the material on record in the light of case laws cited by rival sides on the first issue, we find that Ld. CIT(A) has decided this issue in favour of the assessee as per para 3 & 4 of his order which is reproduced below:

1)( c). The fact of the matter is that the return was -revised and filed within the time allowed by the act and needed to be taken into cognizance while framing the assessment. In fact, it is seen that the revised return has been taken into account by the A.O. and he has taxed the transaction of sale in the year under consideration except that he has changed the head of income from 'income from long-term capital gains'-to 'income from profits and gain of business.' Therefore, even though the A.O. states in para 3 of his order, it is not a valid return, but, in fact, he does use the information contained in the revised return for the purpose of assessment. Taking the entirety of facts into consideration, I have no hesitation to hold the return was validly revised by the assessee under provisions of sec. 139(5) of the Act."