2009 (9) TMI 990

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.... Act, 1961 (hereinafter referred to as 'the Act') vide his order dated 08-03-2006 for the assessment year 2003-04. 2. The only common issue in these cross appeals - one by the assessee and other by the Revenue is as regard to the claim of deduction u/s.10B of the Act. The assessee has raised the following ground:- "Second hand library books of ₹ 38503/- usable for the purpose of computer training classes for students purchased from sister company. Erudite Infotech Pvt. Ltd. is not "plant" within the definition of Plant U/s.43(3) of IT Act 1961. The business of the appellant company is exclusively in software development/and exports thereof, while the business of the appellant's sister company Erudite Infotech Pvt. Ltd. is in runnin....

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.... " At this juncture, it is made clear that the business of the appellant is totally distinct and separate from the business of computer training camied on by the sister concerns and the software development and export being not in dispute, it is to be held that the new unit of the appellant set up of a different premises is not formed by spinning up or the reconstruction of an existing business. But for the purposes of few items of assets, there is no overlopping of the business activities and the appellant's eligible business is new and separate one engaged in the business of development of software and export. Section 10B eligibility is denied on simple and specific ground of old plant and machinery constituting more than 20% of the tot....

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.... and gains of that year in which such conditions are satisfied. However, according to the ld. Counsel, the reverse is not true. It was further contended that in any case, it is an admitted fact that assessee had set up a new industrial undertaking and it had not been formed by transfer of old machinery the value of which exceeded 20% of the total value of the machinery. It was accordingly pleaded that the decision of the CIT(A) for the assessment year 1997-98 may be upheld and for the assessment year 1996-97 the decision of the CIT(A) may be reversed and deduction allowed to the assessee." And finally allowed the claim of the assessee on merits also, as under:- 10. In the final analysis, we, on the facts and in the circumstances of this ....