2007 (2) TMI 355

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....f an undertaking is only at a particular time without appreciating the fact that the formation of industrial undertaking is a continuous process till the point when all the Plant & Machinery required for the production purposes are put in place. 2. On the facts and in the circumstances of the case and in law, the learned CIT(A) erred in holding that second hand machinery has no relevance as the same has been acquired after the production has been started, without appreciating the fact that the second hand machinery in dispute has been acquired during the same financial year and the value of which, exceeds more than 20% of the total cost of Plant & Machinery. 3. The appellant prays that the order of the CIT(A) on the above grounds be s....

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....er of the CIT(A), while the ld. D.R. relied upon the order of the Assessing Officer. 5. Having heard both the parties and having considered their rival contentions, we find following undisputed facts- (i)This unit of the assessee was formed in December, 1999 when the assessee constructed new building and purchased new machinery. (ii)The unit commenced production of colligated boxes in April, 2000. Subsequently in November, 2000 the assessee to meet its additional requirement, purchased a second hand platter machine. Whether the addition of the platter machine would attract the provisions of sub-section (2) of section 80-IB is a question before us. For proper appreciation of the case, section 80-IB(2) reads as under- "Sub-sect....

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....ble shape or configuration, an industrial undertaking has to acquire all the requisite paraphernalia necessary to start its production. It can thus be said to have been formed when it starts the production. In the case on hand, the assessee started its production in April, 2000. It is not the case of the revenue that this second hand machinery was required to achieve its capacity of production. As seen from the statement of facts before the CIT(A), the assessee decided to purchase the platter machine to meet the additional requirement of its major customer M/s. Cipla. This fact has not been controverted by the revenue. Thus as rightly held by the CIT(A) in para 14 of his order, it is not the intention of the Legislature that even after the ....