1990 (5) TMI 60 - AT - Income Tax

Summary

Issues Involved: Appeal against rejection of deduction under sections 80HH and 80-I on income disclosed under Amnesty Scheme for industrial undertaking.

Summary:
1. The appeal was filed by the assessee against the order of the CIT(A) upholding the rejection of deduction under sections 80HH and 80-I on income disclosed under the Amnesty Scheme for the industrial undertaking.
2. The assessee, a firm engaged in manufacturing re-rolled steel products, disclosed additional income under the Amnesty Scheme for the assessment year 1986-87 and claimed deductions under sections 80HH and 80-I as an industrial undertaking.
3. The Assessing Officer denied the deductions, requiring the assessee to prove that the disclosed income was derived from the industrial undertaking, which the assessee failed to establish with evidence such as electricity charges or water bills.
4. The CIT(A) upheld the Assessing Officer's decision, leading the assessee to appeal before the Tribunal.
5. The assessee's counsel argued that the Department was prohibited from making inquiries into the source of disclosed income under the Amnesty Scheme, citing circulars and clarifications supporting this stance.
6. The Departmental Representative contended that the assessee must establish the claim for deductions under sections 80HH and 80-I, and only if stock was disclosed, the deductions would be allowed.
7. The Tribunal held that the Department could not prove the disclosed income was not derived from the industrial undertaking, emphasizing the acceptance of declarations under the Amnesty Scheme without further inquiry. The absence of evidence contrary to the nature of the income led to the reversal of lower authorities' decisions, directing the Assessing Officer to allow the deductions.
8. Consequently, the appeal was allowed in favor of the assessee.