The DCIT, Hyderabad v. Shri Ankush Rao Ingle, Hyderabad

ITA 8/HYD/2010 | 2004-2005
Pronouncement Date: 19-03-2010 | Result: Dismissed

Appeal Details

RSA Number 822514 RSA 2010
Bench Hyderabad
Appeal Number ITA 8/HYD/2010
Duration Of Justice 2 month(s) 14 day(s)
Appellant The DCIT, Hyderabad
Respondent Shri Ankush Rao Ingle, Hyderabad
Appeal Type Income Tax Appeal
Pronouncement Date 19-03-2010
Appeal Filed By Department
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 19-03-2010
Date Of Final Hearing 11-03-2010
Next Hearing Date 11-03-2010
Assessment Year 2004-2005
Appeal Filed On 05-01-2010
Judgment Text
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