JUDGMENT :

Dev Darshan Sud, J.

This is the Revenue's appeal against the order passed by the learned Tribunal affirming the order in appeal preferred by the assessee-respondent partly allowing the appeal. The brief facts which we notice for the determination of this case are that the AO proceeded to assess the income of the respondent-assessee herein disallowing deductions under s.80-IA of the IT Act, 1961 (hereinafter referred to as 'Act'). The AO holds that the respondent was engaged in business of manufacturing of knitted cloth from yarns and has thereafter discontinued his business/operations in Baddi and moved out.

2. The order was passed under s. 143(3)/147 of the Act. The AO noticed that the assessee had filed return for the asst. yr. 1998-99 declaring nil income after claiming deduction of Rs. 61,32,678 under s. 80-IA of the Act. The return was processed under s. 143(1) of the Act. The AO had reason to believe that the income of the respondent had escaped assessment because of the failure on the part of the assessee/respondent to disclose all material facts truly and fully which required further investigation. Consequently, the case was taken for reassessment under s. 147 and n