2013 (6) TMI 502

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....irected against the order of learned CIT(A)-XXVI, New Delhi dated 27th September, 2012 for the AY 2008-09. 2. The only ground raised by the assessee reads as under:- "That on the facts and the circumstances of the case the learned CIT(A) has erred in maintaining the addition of Rs.8,14,073/- out of the addition of Rs.10,48,461 made by the learned AO while completing the assessment on account of ....

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.... of the Income-tax Act, 1961. 4. On appeal, learned CIT(A) did not agree with the above view of the Assessing Officer and held as under:- "5.2 In view of the above discussion, the addition of Rs.4,15,618/- being the appellant's share in the reserve u/s 80HHC in the books of M/s Jyoti Apparels which is transferred and credited to the capital account of appellant partner is not justified. Therefor....

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....33,758/- can only be allowed as transferred to the capital account. Therefore, the addition of Rs.10,48,461/- is restricted to Rs.8,14,073/-, which means the appellant gets relief of Rs.2,33,758/-." 5. The Revenue is not in appeal against the part relief allowed by the learned CIT(A). At the time of hearing before us, it is stated by the learned counsel that when in principle the learned CIT(A) a....

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....ccount. By transfer of such reserve to the capital account, there cannot be any income unless the provision of Section 80HHC so provides. Admittedly, there is no provision in Section 80HHC prohibiting the transfer of reserve so created to the capital account. In view of the above, we agree with the learned CIT(A) that by transfer of reserve to the capital account, no income is generated. However, ....