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2010 (7) TMI 831 - AT - Income TaxDeduction u/s.80IB - transfer of the business activity - HELD THAT:- there was no evidence with the AO through which it could be demonstrated that the machinery was transferred from old unit to new unit. There was no iota of evidence to say that it was a case of “splitting up of the old business. The old unit was closed down way back in the year-1998 and the new unit had come up in the year-2002 and an entirely new building was constructed with the deployment of new technology to manufacture new type of telephone instrument. The assessee has successfully demonstrated that the new unit was set up with the substantial investment in plant & machinery. On account of these facts as well as on account of the legal position, we find no force in the grounds of the Revenue, hence dismissed. In this manner, for AY's 2002-03, 2003-04 & 2004- 05 & 2006-07 in all four years ground No.1 of the Revenue is hereby dismissed. deleting the addition - account of creditors - HELD THAT:- the appellant produced copy of ledger account of the creditors for the subsequent year and submitted that the payment has been already made to the said creditors. Since the appellant has already made payments to the creditors in dispute the addition made on this account is directed to be deleted. The appellant succeeds in this ground of appeal. therefore, in the absence of any contrary material, we have no reason to doubt the findings on facts of the first appellate authority. We hereby affirm those findings and dismiss this ground of the Revenue. addition u/s.68 - account of capital - introduced by the partner - HELD THAT:- Since Learned CIT(A) being under the territorial jurisdiction of the Hon'ble Gujarat High Court has also directed the Assessing Officer to take due legal action in the hands of the partner considering the capital introduced by him in his respective capital account, therefore, in our considered opinion, being within the jurisdiction of the Gujarat High Court, the directions given by the Learned CIT(A) deserves to be upheld and the deletion of addition in the hands of the assessee-firm is hereby confirmed. With the result, ground of the Revenue is dismissed. deduction u/s.80IB - disallowance u/s.40a(ia) - the learned CIT(A) has erred in allowing the deduction u/s.80IB on disallowance u/s.40a(ia).It was noticed by the AO that the appellant had failed to deduct the TDS amount. Because of the said reason a disallowance u/s.40a(ia) was made. HELD THAT:- Since the language itself says that in case of disallowance, the said disallowance should fall under the category of income chargeable under the head “profits and gains of business or profession”, therefore, the impugned disallowance has to be treated as part of the business income of the assessee and thereupon to be taxed as per the other provisions. With the result, we hereby affirm the directions of Learned CIT(A). This ground of the Revenue is dismissed. HELD THAT:- the same is consequential in nature because of the basic reason that once a deduction is allowed u/s.80IB for the year under consideration due to the disallowance for AY 2006-07. In our opinion, the AO is competent enough to take care of the interest of the Revenue by not committing such a mistake of granting double benefit to this taxpayer in any of the subsequent year. We order accordingly. In the result, all the four appeals of the Revenue are dismissed.
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