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TMI Blog2016 (3) TMI 145X X X X Extracts X X X X X X X X Extracts X X X X ..... ent case as the facts brought on record suggests that the similar claim of assessee u/s.80-IA for assessment year 2009-10 to held that new unit established by the assessee for manufacturing articles used as intermediate products in the old division, which the assessee was buying from the market earlier, is not reconstruction of business already in existence. To constitute reconstruction, there must be transfer of assets of the existing business to the new industrial undertaking. In our opinion, generation of power unit is separate and distinct undertaking for which separate approval was obtained and it cannot be said that splitting of existing business structure. Therefore, in our considered opinion, the lower authorities are not correct in denying the deduction under section 80IA of the Act - Decided in favour of assessee - I.T.A. No. 1190/Mds. /2015 - - - Dated:- 15-2-2016 - Shri Chandra Poojari, Accountant Member And Shri G. Pavan Kumar, Judicial Member For the Appellant : Mr. A. Dhananjayan, C. A For the Respondent : Mr. Pathalavath Peerya ,CIT, D.R ORDER Per Chandra Poojari, Accountant Member This appeal is filed by the Assessee is directed against th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the AO cannot be treated as prejudicial to the interest of the Revenue. If the AO adopted one view of the course permissible in law and it is resulted in loss to the Revenue, where two views are possible and with which CIT does not agree, it cannot be treated as an erroneous order, prejudicial to the interest of the Revenue, unless the view taken by the ITO is unsustainable in law. In the present case as the facts brought on record suggests that the similar claim of assessee u/s.80-IA for assessment year 2009-10 was a subject matter of appeal before the Tribunal in ITA No.633/Mds./14 vide order dated 24.07.2015 wherein held as follows:- 7. We have heard both the parties and perused the material on record. The assessee company was engaged in manufacture of paper and production of electricity from windmills upto the assessment year 2003-04. The assessee company constructed cogeneration building during financial years 2003-04 and 2004-05 to house the new Turbine cum boiler unit to produce steam and electricity. The company invested 1,77,39,233/- towards co-gen machinery and invested 36,78,188/- in co-gen building totalling 2,14,17,421/- towards new unit. The company also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was not entitled to claim of deduction u/s.80IA of the Act on its turbine division. In order to decide the above issue, we first proceed to examine the legal position in this regard. 8. Now, we proceed to examine the provision of section 80-IA of the Act which was amended by the Finance Act, 1999 w.e.f. 1st April, 2000. The deduction under s. 80-IA was available to an assessee whose gross total income included any profits or gains derived from any business of an industrial undertaking which fulfilled all the conditions laid down in that behalf in sub-s. (2) of the section. The sub-s. (2) of s. 80-IA, as applicable to this assessment year 2009-2010,inter alia, reads as under : (2) The deduction specified in sub-section (1) may, at the option of the assessee, be claimed by him for any ten consecutive assessment years out of fifteen years beginning from the year in which the undertaking or the enterprise develops and begins to operate any infrastructure facility or starts providing telecommunication service or develops an industrial park (or develops a special economic zone referred to in clause (iii) of sub-section (4) or generates power or commences transmission or dist ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. 9. The primary purpose of u/s. 80-IA is to grant relief to a new industrial undertaking. Therefore, whenever an assessee claims relief u/s. 80-IA, the assessee will have to establish that a new unit had come into existence which independently produced articles and that this new unit was not dependent upon the old existent unit, in the sense that the new unit could not be equated as an expansion of the old unit. 10. Where an assessee makes a claim for relief u/s. 80-IA the burden lies upon him to produce cogent material in support of his claim. In order to avail tax concession u/s. 80-IA, employment of fresh capital in the new unit is imperative. But it does not mean that for the employment of the capital, it should have been newly raised. If surplus/reserve capital is available with an assessee in its existing business, the assessee can utilize such capital for the purpose of plant, machinery, etc., for the new unit. 11. In our opinion the splitting of or reconstruction of the existing b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roducing the steam and electricity. 16. We find that the assessee company commenced a distinct industrial undertaking for the generation of power. It is an undisputed fact that the premises of this undertaking are distinct from the paper unit as separate building was constructed vide approval No. 15442/2003 at survey Nos.417, 423, 424 426 at Nallur Village, Pushpathur Panchayat, Palani Taluk, Dindigul District. Separate technology is used and loan was also obtained from State Bank of India, Commercial Branch, Trichy Road, Coimbatore. The lower authorities are not correct in holding that the power plant was not a distinct unit. The true principle as laid down by the Apex Court, in the case of Textile Machinery Corporation Ltd., Vs. CIT 107 ITR 195, directly and squarely applies to the facts of the case. In the instant case, the true test is not whether the new industrial undertaking connotes expansion of the existing business of the assessee but whether it is all the same a new an identifiable undertaking separate and distinct from the existing business of the assessee but whether it is all the same a new and identifiable undertaking separate and distinct from the existing b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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