TaxTMI 
TaxTMI 
2012 (8) TMI 32
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....he facts and circumstances of the case and law, the disallowance made by the Learned Assessing Officer and confirmed by the Learned Commissioner of Income Tax (Appeals) are contrary to law and based on erroneous understanding of the facts. 03. On appreciation of the facts and circumstances of the case and interpretation of law, the Learned Commissioner of Income Tax (Appeals) has erred in confirming the action of the Learned Assessing Officer in not granting deduction U/s.80IB of the Act from the profits and gains of the appellant on the basis that the industrial undertaking is formed by reconstruction of a business already in existence. The action of the Learned Commissioner of Income Tax (Appeals) is based on presumptions and surmises,....
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....been informed that the Assessing Officer vide an order u/s.143(3) dated 6/12/2008 as well as Learned CIT(Appeals); both have expressed that the disallowance of the claim was based upon the findings of the past years made in assessee's own case. The claim u/s.80IB(2) was disallowed on the ground that the "industrial undertaking" should not be formed by "splitting up" or "re-construction" of a business already in existence. However, this very issue now stood settled by ITAT "D" Bench Ahmedabad pronounced in assessee's own case titled as "Shri Abbas Nabi Shaikh vs. Asst.CIT" in AYs 2003-04 & 2004-05 bearing ITA Nos.1496 & 2586/Ahd/2007, order dated 22/10/2010, wherein an earlier order has been referred and decided as follows:- "14. It wo....
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....may stop functioning immediately or after sometime. If old unit runs parallel for some time and thereafter it stop functioning then it is not going to make any difference. One cannot say that if old unit stops functioning immediately on the start of new unit it would be a case of reconstruction and if old unit stops functioning after a year or so, after the new unit starts functioning, it will not be a case of reconstruction of business already in existence. Further, if the argument of the Id. DR is accepted then several unit's where same business is carried out, would always be treated as reconstruction of a business already in existence and thus denying the benefit otherwise available to the tax payer, Therefore, carrying on the same b....
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....cy, logic, coherence etc, is to apply when the words in question represent legal conception. The difficulty with the AO was that he has held that the assessee in question has transferred its "business activity" from old unit to the new unit. Is if the technical term used in this section? Answer to this question is in negative. However, the entire order of the AO revolve around the genera! meaning of "transfer of the business activity" but contrary to this, the sub-section (2) of section 80IB is prescribing some other technical terms, such as the "industrial undertaking" should not be formed by "splitting up" or "reconstruction" of a business already in existence. Likewise sub-clause (ii) of sub-section (2) of section 80IB of the IT Act, ....
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....uments was based upon an altogether new technology. 9. An another fact has also been considered by the AO but in a different manner. The fad was that the old unit at Mogarwada Damon was closed down in the year 1998. This fact was moulded by the AO in the farm that the said old unit was closed down which had given birth to a new unit at a different place by shifting the business from one place to another. Even (his reasoning of the AO cannot be approved because the presumption that the old unit had give a birth to new unit had no legal basis no legal sanctity and above all without, any cogent evidence. Undisputedly the new unit came into existence after the gap of few years. It was undisputedly started in the year 2002, Surprisingly the A....