TMI Blog2009 (10) TMI 544X X X X Extracts X X X X X X X X Extracts X X X X ..... Per Deepak Gupta, J. This appeal was admitted on the following questions of law:- "1. Whether on the facts and in the circumstances of the case the Hon'ble ITAT was right in law in holding that income of Rs.2,50,000/- surrendered by the assessee during the assessment proceedings was income derived from the business of the Industrial Undertaking and thus eligible for deduction under Section 80 IB as the Assessing Officer had not specifically proved that the income was not from the Business and Profession? 2. Whether on the facts and in the circumstances of the case the Hon'ble ITAT was right in law holding that 100% deduction under Section 80 IB was allowable to the assessee on the surrendered income whereas the assessee surrende ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been installed there was no expenses for repair and maintenance and hence the higher rate of profit. During the course of assessment proceeding, the assessee offered a sum of Rs.2,50,000/- for taxation to cover up all discrepancies. Relevant portion of the order reads as follows:- "These defects were brought to the notice of the assessee-firm's general power of attorney Shri A.K.Mahajan, who explained that being new machinery in M/s Allied Industries, no expenses have been borne for repair and maintenance and other expenses have been debited on actual basis. Further he offered a sum of Rs.2,50,000/- for taxation to cover up all types of discrepancies and also this amount will include disallowance on account of late payment of ESI. This o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see or the revenue that this was income derived from undisclosed sources. Section 69 (c) has no applicability because to make Section 69(c) applicable it has to be first established that there is some unexplained expenditure. There is no finding of unexplained expenditure being made by the assessee. The Judgement cited by Shri Kuthiala, learned counsel for the Revenue, i.e. Kedar Nath Modi vs. Commissioner of Income-tax, 1993 (Vol.200), ITR page 685 has no applicability to the present case since in that case there was unexplained expenditure which is not there in the present case. The addition of Rs.2,50,000/- was made to the income of the business itself. Therefore, it will have to be deemed to be income from the business of the Company. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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