1978 (9) TMI 24

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....The business, it appears, was carried on in the name of North Bihar Saw Mill. Certain machineries were purchased for their installation at Ghorasahan in February, 1961. On April 15, 1961, the firm was dissolved. On the dissolution of the firm, the saw mill, which was under installation at Ghorasahan, came to the share of the assessee. During the assessment year 1962-63, the assessee claimed exemption in respect of the saw mill, whose installation was completed at Ghorasahan after dissolution of the partnership under s. 84 (now replaced by s. 80J) of the I.T. Act, 1961. The claim was on the ground that it was a new industrial undertaking. The assessing officer held that the new industrial undertaking came into existence on the splitting up ....

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....imed. The meaning of the expression " reconstruction has now been finally settled by the decision of the Supreme Court in Textile Machinery Corporation Ltd. v. CIT [1977] 107 ITR 195, wherein the observation of Buckley J. in In re South African Supply and Cold Storage Co. [1904] 2 Ch 268 (Ch D), dealing with the meaning of the word " reconstruction " in a company matter, has been approved. The Supreme Court has also approved the decision of the Bombay High Court in CIT v. Gaekwar Foam and Rubber Co. Ltd. [1959] 35 ITR 662 as also the decision of the Delhi High Court in CIT v. Ganga Sugar Corporation Ltd. [1973] 92 ITR 173, 179, where the following observations were made : " We have given the matter our earnest consideration and are of the....

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....s. 84(2) of the Act. In our view, it is not necessary to define as to what the expression splitting up of a business " means. It will be sufficient to indicate that, in the facts and circumstances of the case, it cannot be said that the new industrial undertaking of the assessee was formed by the splitting up of any existing business. The view of the AAC and the Tribunal is also to the same effect. It has to be observed that the partnership business carried on in the name of Bihar Trading Company was dissolved on April 15, 1961. On the date of dissolution, the saw mill had not been completely installed or was so working at Ghorasahan. The assessee, on dissolution of the partnership, had no interest in the business which migh have been carr....