1979 (4) TMI 25

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....tances of the case, the Tribunal was right in law in holding that the industrial undertaking running the new re-rolling mill was not formed by the reconstruction of the business already in existence? " The facts giving rise to these reference applications are these : The assessee, i.e., M/s. Batala Engineering Co. Ltd., Ballabgarh, is a limited company and in addition to manufacturing machine tools, it has re-rolling mill also. The accounting year followed was the financial year. The assessee is in re-rolling business since 1933. The mill which was about 30 years old had outlived its utility and that mill was, therefore, scrapped in June, 1962. The assessee installed a new mill which started functioning from July 29, 1962. The new machiner....

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.... the AAC accepted the assessee's claim for exemption under s. 84 of the Act for the assessment year 1963-64. He found that the new rolling mill was an industrial undertaking within the meaning of s. 84 of the Act and it was not a case of reconstruction or continuing in operation of the old undertaking. The revenue, being aggrieved by this order of the A AC, filed an appeal before the Income-tax Appellate Tribunal, Chandigarh, and pleaded that s. 84 being an exemption clause, must be construed strictly and in support thereof placed reliance on the judgments in Crown Flour Mills v. CIT [1956] 29 ITR 733 (Punj), CIT v. Ramakrishna Deo [1959] 35 ITR 312 (SC), Parimisetti Seetharamamma v. CIT [1965] 57 ITR 532 and Udhavdas Kewalram v. CIT [1967....

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....e machinery was taken out is used for storage. On the facts of this case, we do not have the slightest hesitation in coming to the conclusion that the new rolling mill set up by the assessee is not formed by the reconstruction of a business already in existence. " The learned counsel for the revenue vehemently argued that though the Supreme Court in Textile Machinery Corporation Ltd. v. CIT [1977] 107 ITR 195 did reverse the judgment of the Calcutta High Court in CIT v. Textile Machinery Corporation [1971] 80 ITR 428, yet the observations made therein, at page 448, are quite relevant and have not been held to be wrong. We do not find any force in this contention. Their Lordships of the Supreme Court in the said authority have clearly laid ....