2011 (9) TMI 1086

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....fact that the new unit is nothing but the extension of old unit." 2. The relevant facts of the case are that the assessee is a company and is engaged in the business of manufacturing and supplying of superior quality flexible packaging materials such as monolayer films and various types of laminates. For the manufacture of these products, the assessee had set up industrial undertaking in the A.Y.2000-01 at Dhimpora Daman which was eligible for deduction under section 801B of the Income Tax Act. The rate of deduction was @ 100% of the profit of the undertaking up to A.Y.2004-05. The profit of this unit is eligible for deduction @ 30% in the current year i.e., AY 07-08. The assessee had claimed that in the Assessment year 2004-05, it has set....

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.... section 80 IB of the Act on profits of Unit II at 100%. The CIT(A) accepted the contention of the assessee and directed the AO to allow deduction as claimed by the assesse. 4. Aggrieved by the order of the CIT(A) the revenue has preferred the present appeal before the Tribunal. 5. At the time of hearing of this appeal it was brought to our notice that in A.Y 2004-05 there was no appeal preferred by the revenue against the order of the CIT(A) since there was no tax effect. However for A.Y 2005-06 and 2006-07 on an identical issue in the case of the assessee, the CIT(A) had followed the order of the CIT(A) in A.Y 2004-05 and allowed the claim of the assessee. Against the orders of the CIT(A) for A.Y 2005-06 and 2006-07 the revenue had fil....

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....g "monoleyer poly films" and (ii) that the process of manufacturing in both the Units was different as explained by the assessee with the help of a process flow chart. It also appears to us from the specimen invoices flied by the learned counsel for the assessee before us that though the products manufactured by both the Units fell under the same excisable goods, namely; plastic plain & printed bags" and the tariff was also the same, the quality was different as can be seen from the fact that the product manufactured by Unit I was priced at 408.14 per unit whereas the product manufactured by Unit II was priced at 696.89 per unit. ft is noteworthy that the invoice relating to Unit I shown before u is. dated l March 2004 whereas the invoice o....

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....22 Act. Both the judgments show that the decisive test is that the industrial units set up must be new in the sense that new plant and machinery should be installed for producing either the same commodities or some distinct commodities. It has further been held that the new undertaking should not be formed by the reconstruction of the old business. In the present case we have already seen that even the Assessing Officer has accepted the assesseeRs.s claim that Unit II was set up with the help of new plant and machinery for acquiring which the assessee had to incur additional term loan of ₹ 1,2O,OO,OOOI-. There is no evidence to show that any plant or machinery used in Unit I was dismantled and installed in Unit II. The only argument ....