TaxTMI 
TaxTMI 
2008 (2) TMI 283
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....ee was entitled for the deduction as claimed by it under section 80-I of the Act ?" 2. The Assessment Years are 1982-83, 1983-84. The relevant accounting periods are calender years ended on 31.12.1981 and 31.12.1982, respectively. The assessee, a public limited company, claimed deduction under sec. 80-I of the Act, which was disallowed by the Assessing Officer on the basis of a report tendered by the Inspector on 16.9.1985. The claim for the first Assessment Year is restricted to a part of year considering the fact that the plant was commissioned with effect from 2.6.1981 for manufacture of Um-1 and Um-3 types of Dry Cell Batteries. The Inspector, in his report stated as under: "During the accounting year under consideration, the assessee....
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....uch on the earlier existing facilities like Zinc and Electrolyte section and other utilities viz. Air, Water, Gas and Electricity generator etc. and they are not capable of functioning on their own without seeking assistance from the old facilities." 4. The assessee carried the matter in appeal before the Commissioner (Appeals) and succeeded. The Revenue carried the matter in Second Appeal before the Tribunal. The Tribunal has upheld the order of Commissioner (Appeals) by recording, thus: "From the facts and circumstances as have been brought in the appeal records, it cannot be said that the new industrial undertaking has been brought into existence by reconstruction or by splitting up the old business or transferring the old plant and ma....
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....d advocate has invited attention to the following four decisions: (1) Textile Machinery Corporation Ltd. v. CIT (1977) 107 ITR 195 (SC) (2) CIT v. Indian Aluminium Co. Ltd. (1977) 108 ITR 367 (SC) (3) CIT v. Shree Digvijay Cement Co. Ltd. (1983) 144 ITR 532 (Guj.) (4) CIT v. Shri Digvijay Cement Co. Ltd. (1986) 159 ITR 253 (Guj.) 7. Section 80-I as is relevant for the present, reads as under: "80-I. (1) Where the gross total income of an assessee includes any profits and gains derived from an industrial undertaking or a ship or the business of a hotel, to which this section applies, there shall, in accordance with and subject to the provisions of this section, be allowed, in computing the total income of the assessee, a deductio....
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....rtaking, any machinery or plant or any part thereof previously used for any purpose is transferred to a new business and the total value of the machinery or plant or part so transferred does not exceed twenty per cent of the total value of the machinery or plant used in the business, then, for the purposes of clause (ii) of this sub-section, the condition specified therein shall be deemed to have been complied with." 8. On a plain reading, it transpires that under sub-section (1) of Sec. 80-I of the Act, an assessee becomes entitled to a deduction equal to twenty per cent of the profits and gains where the gross total income of an assessee includes any profits and gains derived from an industrial undertaking, to which, section 80-I applies....
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....he Act. The said condition vide clause(ii) places an embargo in case of an industrial undertaking which is formed by the transfer, of machinery or plant previously used for any purpose, to a new business. In fact, during course of hearing, the learned advocate for the applicant Revenue was not in a position to even point out that this was the case of the Revenue. No new business as such has been set up by the assessee. Therefore, there is no question of any transfer to such new business of any plant or machinery previously used for any purpose. Therefore, strictly even clause (ii) cannot be invoked to deny the claim of the assessee. Thus, in effect, none of four conditions laid down in sub-section (2) of Section 80-I of the Act, are shown t....