CIT Vs. VALLABH YARNS (P) LTD

JUDGEMENT

(1.) The Revenue has preferred this appeal under Section 260A of the IT Act, 1961 (for short the Act) against the order passed by the Income-tax Appellate Tribunal, Chandigarh Bench A, Chandigarh (in short the Tribunal) in ITA No. 226/Chd/2009, for the asst. yr. 2004-05 claiming that the following substantial questions of law arise in this appeal:

(2.) Briefly stated, the fact of the case are that the Respondent-Assessee company derives income from manufacturing and sale of finished knitted fabrics and readymade garments. The Assessee filed return of income for the asst. yr. 2004-05 on 21st Oct., 2004 disclosing taxable income of Rs. 34,57,734. The return was processed under Section 143(1) of the Act on 14th Jan., 2005. The assessment under Section 143(3) of the Act was finalised on 15th Dec, 2006 at income of Rs. 36,43,252. The AO had allowed the deductions under Section 80-IB of the Act to the Assessee and disallowed deduction on receipts of lease rent on machinery and interest income.

(3.) The Commissioner of Income-tax-I, Ludhiana (for short the CIT) in exercise of powers under Section 263 of the Act came to the conclusion that the Assessee was not entitled to deduction under Section 80-IB on the following amounts: <FRM>JUDGEMENT_415_LAWS(P&H)9_2010.htm</FRM>