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Issues:
Appeal by Department against first appellate authority's orders for asst. yrs. 1982-83 and 1988-89. Analysis: The case involved the denial of registration to a firm for asst. yrs. 1982-83 and 1988-89 based on a statement made by one of the partners during a search. The AO observed that the partner did not mention her status as a partner during the search, leading to the denial of registration. The first appellate authority allowed the appeal for 1982-83 and directed verification for 1988-89. The Department appealed, arguing that the partner's subsequent affidavit was an afterthought. The assessee's counsel highlighted the firm's long-standing history, consistent constitution, and lack of evidence of diversion of profits. The ITAT considered the partner's later admission of her status, the firm's historical registration, and the lack of changes in constitution. The ITAT upheld the first appellate authority's decision, citing a similar case from the Ahmedabad Bench in favor of the assessee. Consequently, the Department's appeals for both years were dismissed.
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