Tribunal upholds CIT(A)'s decision granting exemption under section 80IB for genuine manufacturing activities.

The Tribunal dismissed the revenue's appeals for AY 2005-06 and AY 2004-05, upholding the CIT(A)'s decision to allow exemption u/s. 80IB for the assessee. The Tribunal found the assessee had fulfilled requirements for the deduction, complying with regulations and conducting genuine manufacturing activities, supported by evidence presented.

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Issues:
Appeal against order of CIT(A) allowing exemption u/s. 80IP of the Income-tax Act, 1961 for AY 2005-06 and AY 2004-05.

Analysis:
1. Delay in filing appeals:
- Revenue filed appeals for AY 2005-06 and AY 2004-05 with a delay of 3 days and 11 days respectively. The condonation petition was filed, and since no objection was raised by the assessee, the delay was condoned, and the appeals were admitted for hearing.

2. Common issue of exemption u/s. 80IB:
- The appeals raised a common issue against the order of CIT(A) allowing exemption u/s. 80IB of the Act. The grounds in both years highlighted errors in allowing 100% exemption under this section, which was considered a substantial question of law.

3. Assessee's stance and Tribunal's analysis:
- The assessee argued that the issue of deduction u/s. 80IB was favorably decided in a previous Tribunal case. The AO disallowed the deduction, alleging non-existence of the firm and manufacturing activities. However, the CIT(A) allowed the deduction after considering various evidences submitted by the assessee, including licenses, registrations, and bills.

4. CIT(A)'s decision and Tribunal's conclusion:
- The CIT(A) found the AO's conclusions unsubstantiated and based on suspicion rather than fresh evidence. The Tribunal noted that the assessee had complied with regulations, obtained necessary licenses, and provided evidence of business operations. The Tribunal upheld the CIT(A)'s decision, stating that the assessee had fulfilled requirements for the deduction u/s. 80IB, and dismissed the revenue's appeal for both AYs.

5. Final verdict:
- The Tribunal dismissed the revenue's appeals for AY 2005-06 and AY 2004-05, as the factual aspects supported the assessee's claim for exemption u/s. 80IB. The decision was based on the evidence presented by the assessee, demonstrating compliance with regulations and conducting genuine manufacturing activities.

In conclusion, the Tribunal upheld the CIT(A)'s decision to allow the exemption u/s. 80IB for the assessee, dismissing the revenue's appeals for both assessment years based on the factual evidence and compliance demonstrated by the assessee.

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