2012 (8) TMI 1133

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....rief facts of the case are that respondent/assessee was engaged in the business of manufacturing and export of gems and silver jeweleries. The assessee claimed deduction under Section 10-A of the Income Tax Act, which was disallowed by Assessing Officer. Commissioner of Income Tax (Appeals), on an appeal preferred on behalf of assessee, allowed the exemption, claimed by the assessee and set aside the order of Assessing Officer. Thereafter, Department preferred an appeal before the Tribunal, which has been dismissed. Thereafter, Department has preferred this appeal. 4. Submission of learned counsel for the appellant is that Assessing Officer rightly disallowed the claim of exemption made by assessee. The Commissioner of Income Tax (Appeal....

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....hri Pitambar Sharma did not divert the funds from his existing concern to the new company but invested share capital of M/s Shagun Gems Pvt. Ltd. from realization of his assets other than the capital employed in the firm. Secondly, it is clear from the bills submitted that the new plant & machinery was purchased by the concern. Thirdly, out of 70 employees in the new concern, only 8 were from the earlier concern. In view of the above facts, it cannot be concluded that the new company i.e. M/s Shagun Gems Pvt. Ltd. is nothing but reconstruction of old business within the meaning of provisions of section 10A(2)(ii). On the basis of these facts and judicial pronouncements relevant to these facts, the exemption claimed by the assessee u/s 10A o....