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Issues involved: Appeal against order deleting addition u/s 80IB and accepting fresh evidence u/s Rule 46A of IT Rules, 1962.
Issue 1 - Addition u/s 80IB: The department appealed against the deletion of an addition made u/s 80IB for assessment year 2006-07. The assessee, a Hindu Undivided Family (HUF), claimed deduction u/s 80IB for profits from a unit set up at Baddi, Himachal Pradesh. The Assessing Officer disallowed the deduction as the value of old machinery provided by another company exceeded the permissible limit under Explanation 2 of section 80IB. The CIT(A) accepted the assessee's plea that the value of machinery did not exceed the limit and directed the deduction to be allowed. Issue 2 - Fresh evidence under Rule 46A: The department raised a ground regarding the acceptance of fresh evidence in violation of Rule 46A of IT Rules, 1962. The Tribunal found that the department failed to show any fresh evidence accepted by the CIT(A) without following the mandatory conditions of Rule 46A. Consequently, this ground was dismissed. In the appeal, the department argued that the CIT(A) wrongly allowed the deduction u/s 80IB without proper evidence. The assessee contended that all relevant documents were submitted to establish eligibility for the deduction. The Tribunal observed that the Assessing Officer's rejection was based on the total value of old machinery exceeding the limit, while the CIT(A) found otherwise. Since the department failed to provide contrary material, the CIT(A)'s decision was upheld, and the appeal of the Revenue was dismissed. In conclusion, the Tribunal upheld the CIT(A)'s decision regarding the deduction u/s 80IB and dismissed the department's appeal.
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