The appellant is a proprietor of Dhulichand Textile Mills. In the course of search and seizure conducted under Section 132(4) of the Income Tax Act, 1961 (for short ‘the Act’) on 13.07.1994, it was noticed that stock worth Rs.6,40,000/- was found in the business premises of M/s. Venkateswara Balaji Textiles and stock worth Rs.4,00,000/- was found in unmanned godown. The appellant explained that to be the income from other concerns. In compliance with the notice issued under the relevant provisions of the Act, the appellant submitted his return for the Assessment Year 1995-96. However, he claimed deduction of those two amounts under Section 80HH and 80I of the Act. The Assessing Officer did not allow such deductions. Aggrieved by the order of assessment, the appellant approached the Commissioner of Income Tax (Appeals-II), Hyderabad. The appeal was allowed through order dated 23.06.1998. The Revenue challenged the order of the Commissioner by filing I.T.A.No.660/Hyd/1998 before the Hyderabad Bench ‘B’ of the Income Tax Appellate Tribunal. The appeal was allowed through order dated 25.06.2003. Hence, this further appeal under Section 260A of the Act. Heard Sri Venkat Ram Reddy, learned counsel for the appellant and Sri S.R.Ashok, learned counsel for the respondent.
