2017 (9) TMI 191

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....by the department in respect of the assessment year 2001-02 has been allowed. The assessee company was incorporated on 14.10.1999 for running a Flour Mill. There was another company known as M/s. M.C. Roller Flour Mills Limited. It had two units known as M.C. Roller Floor Mills and Shri Ram Flour Mills. The second unit of the aforesaid company was purchased by the assessee as a whole including its plant and machinery. Accordingly, the said unit Shri Ram Flour Mills stood transferred to the assessee and came under its control and management. Section 80-IB of the Act provides for certain percentage of deductions in computing the total income of the assessee from its profits and gains. The benefit of such deduction is permissible if the ....

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....ose as contemplated by Section 80-IB (2) (i) and (ii) of the Act so as to claim the benefit of deductions under Section 80-IB of the Act?" The argument of Sri Suyash Agrawal, learned counsel for the assessee is that as the entire business of one particular unit has been taken over by the assessee, there is no reconstruction of the business already in existence and the business of the assessee is not formed by the transfer of machinery and plant previously used for any purpose, in as much as, the whole of the business was taken over and has continued as such by the assessee. Sri Ashish Agrawal, learned counsel for the revenue has rebutted the aforesaid argument contending that transfer of the entire business unit to the assessee includ....

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....iii) of Sub-section (2) of Section 10 A of the Act are identical and para materia with the conditions referred to above in clause (i) and (ii) of Sub-section 80-IB of the Act but for claiming benefit in respect of newly established undertaking in free trade zone. Notwithstanding the employment of the same language in Section 10 A and Section 80-IB of the Act, the aforesaid authority does not help the appellant as their the change was of the same business from proprietorship to partnership with no resultant transfer whereas in the present case there is a clear transfer of business from one company to another company including plant and machinery used by one of the units of the earlier company for the business purposes of the transferee co....

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....ction of the existing industrial undertaking. In fact, transfer of the used plant and machinery to a new undertaking and the formation of an industrial undertaking are two separate conditions/things which are contained in two different classes of the aforesaid provision which can not be joined. The transfer of the used plant and machinery may not result in splitting and reconstruction of the existing industrial undertaking but nevertheless when an unit as a whole is transferred, it includes the transfer of plant and machinery which was in use by the existing unit of a separate legal entity for the formation of a separate industrial undertaking. This kind of transfer is clearly hit by clause (iii) of Sub-section (2) of Section 10 A of ....