TMI Blog2016 (11) TMI 161X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. - Income Tax Reference No. 1, 2 of 2008 - - - Dated:- 8-6-2016 - KS Jhaveri And G. R. Udhwani, JJ. Mr Sudhir M Mehta, Advocate for the Applicant Mr SN Divatia, Advocate for the Respondent JUDGMENT ( Per : Honourable Mr. Justice KS Jhaveri ) 1. Bot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clothes. The assessee filed return of income for the A.Y. 1980-1981. The assessment was finalized u/s.143(3) of the Act. However, the Assessing Officer withdrew the Investment Allowance by passing order u/s.155(4) of the Act on the ground that Partners of the firm have credited the Investment Allowance reserves to their capital account as profit before the expiry of 10 years, as laid down in Section 32A of the Act and thereby, reassessed the total income. 4. Being aggrieved by the assessment made by the A.O., the assessee preferred appeal before the CIT(A), Surat. The appellate authority cancelled the order of the A.O. passed u/s.155(4) of the Act. Against the said order, the Revenue preferred second appeal before the Tribunal. The Trib ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 nonbusiness purpose and had not been utilized for purchase of plant and machinery. 8. In the aforesaid set of facts and circumstances, it is not possible to accept the contention of Revenue that the Tr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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