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TMI Blog2004 (9) TMI 578X X X X Extracts X X X X X X X X Extracts X X X X ..... erial consisting of 52 episodes during the previous year relevant to the assessment year and sold the serial to M/s. Zee Telefilms Ltd. The serial was encapsulated by the assessee by hiring out TV cameras, special lights, generators, sound equipments, etc. Necessary equipments as stated above were not owned by the assessee but they were taken on hire. The assessee had also hired editing studios equipped with sophisticated systems. 3. The assessee, while computing its taxable income has claimed Rs. 77,953, being deduction available under section 80-IA. The Assessing Officer found that the assessee had not owned any plant and machinery of its own and everything was hired by it and, therefore, the assessee could not be considered as an ind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nst the above that the assessee has come in second appeal before us. 5. Shri Hiro Rai, the learned advocate, appearing for the assessee, argued the case at length. He pointed out that the conditions pointed out by the CIT(A) are applicable only in a case where the assessee has procured the plant, machinery and equipments on transfer and/or in the case of plant and machineries procured from outside India. In the present case, the assessee has arranged the necessary equipments on hire and, therefore, the question of transfer does not arise. Therefore, the relevant conditions pointed out by the CIT(A) do not apply to assessee s case. 6. To a query put by the Bench in the course of hearing that whether the hiring resorted to by the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4). 7. The learned advocate further contended that the production of a feature film/TV serial being considered as a manufacturing activity, deployment of hired machinery would not make any adverse effect on the claim of the assessee in making a claim for deduction under section 80-IA. He relied on the decision of the Hon ble Bombay High Court in CIT v. Penwalt India Ltd. [1992] 196 ITR 813 1 , wherein the assessee was getting part of its activities performed by outsiders, but the business carried on under the direct supervision and control of the assessee, was held to be entitled for special deduction provided under section 35 of the IT Act, 1961. In the present case, the learned advocate submitted that the assessee is in better foo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lopment of industries in different parts of the country and the provisions never meant that the deductions must be given to the industries like film industries. He contended that the assessee did not own any plant, machinery or equipment. The learned departmental representative pointed out that the Hon ble Supreme Court has laid down the parameters of a new industrial undertaking in the case of Textile Machinery Corpn. Ltd. v. CIT [1977] 107 ITR 195 , which has been followed by the Supreme Court in CIT v. Orient Paper Mills Ltd. [1989] 176 ITR 110. The Supreme Court has laid out that the assessee be pumping substantial fresh capital for the purpose of establishing the new industrial undertaking and the assessee should organise the e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... new industrial undertaking has been formed by transfer of assets or by procurement of assets from outside India. In the present case, the plant and machinery and equipments were deployed on hire. Whether this hiring of equipments amounted to transfer or right to use was an important question. But the learned advocate has answered the question in a proper manner. He has rightly relied on the decision of the Hon ble Bombay High Court in Bayer Agrochem Ltd. s case ( supra ). The Court has held therein that the hiring of items in such circumstances did not amount to a transfer and it could be at the maximum a case of licence alone. Accordingly, we find that on hiring the necessary equipments, the assessee had not acquired any right over the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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