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2016 (11) TMI 161 - HC - Income TaxInvestment Allowance - ITAT held that by crediting the Partners’ capital account by the amount standing to the credit of the investment allowance reserves account does not result in distribution by way of profit of such reserves - Held that:- It appears that the amount representing Investment Allowance reserve had been, in fact, utilized before the expiry of 10 years for the purchase of new plant and machinery but, the cost of the new plant and machinery had been debited to plant and machinery account and not to Investment Allowance reserve account because of the accounting practice and hence, the Investment Allowance reserve account was debited and Partners’ account was credited. In our opinion, making entry in this manner would not mean that the reserve account had been utilized for distributing profits or for any non-business purpose and had not been utilized for purchase of plant and machinery. Thus it is not possible to accept the contention of Revenue that the Tribunal committed any error in law. Thus, we are of the view that no substantial question of law arises in these references.
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