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TMI Blog2005 (5) TMI 63X X X X Extracts X X X X X X X X Extracts X X X X ..... different from the old unit and manufacturing an item was also different to that manufactured earlier - Tribunal further found that apart from the items other than those which had been transferred from the old to the new unit no other machinery was used or utilised by the new unit in its manufacturing process – Thus, Tribunal rightly held that the assessee was entitled for deduction under sections 80HH and 80-I - - - - - Dated:- 3-5-2005 - Judge(s) : R. K. AGRAWAL., RAJES KUMAR. JUDGMENT The Income-tax Appellate Tribunal, Allahabad, has referred the following two questions of law under section 256(1) of the Income-tax Act, 1961 (hereinafter referred to as "the Act"), for opinion to this court for the assessment years 1990-91 and 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r to that during the previous year 1988-89 relevant to the assessment year 1989-90, the assessee is stated to have started a new concern, under the name of "M/s. Khandelwal Wires" with effect from June 1, 1988. It was claimed that machinery worth Rs. 1,64,164 had been installed in the said unit. As the said concern was following the financial year as its previous year, the first assessment year was 1989-90 for which the assessee reflected a net loss of Rs. 6,499 and after adjusting the same with the profit of M/s. Khandelwal Electricals as also adjusting various other deductions income was returned at a figure of Rs. 4,62,102. No deductions under sections 80HH and 80-I of the Act were claimed for the assessment year 1989-90 in respect of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... val submissions and have also perused the material on record to which our attention was invited during the course of the hearing. The decisions cited at the bar have also been duly considered. At the outset, we must highlight that the provisions of sections 80HH and 80-I envisage a similar type of scheme for allowing deduction at a stipulated percentage, of the profits and gains derived from an industrial undertaking. Even the conditions to be fulfilled are quite identical, viz.,: (i) manufacture or produce articles before a specified date; (ii) should not be formed by the splitting up, or the reconstruction of a business already in existence; (iii) not formed by the transfer to a new business of machinery or plant previously used; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hinery or the whole or the assets of the new unit. Another exception had been taken this time by the Commissioner of Income-tax (Appeals) as to the fact that the number of workers was less than ten 'initially', viz., in April and May, 1989, although he did not dispute that the limit was exceeded in the subsequent months. In our opinion it is sufficient compliance with the condition if the workers remain ten or more during a substantial part of the year and which is a fact in the present case. The total number of workers are ten and more throughout the year if office workers are included and exceeds the stipulated number for all the months with the exception of April and May, 1989 in case office workers are excluded. On coming to the oth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the old to the new unit were not used or utilised by the new unit in its manufacturing process. The onus to prove so was on the Revenue. Then again the exemptions granted by the various State Govt. authorities cannot be ignored. These do prove the assessee's case that a 'new unit' came into existence." The Tribunal also placed reliance on various decisions cited on behalf of the assessee and more particularly the following: (1) CIT v. Hindustan General Industries Ltd. [1982] 137 ITR 851 (Delhi); (2) Nagardas Bechardas and Brothers P. Ltd. v. CIT [1976] 104 ITR 255 (Guj); (3) CIT v. Ganga Sugar Corporation Ltd. [1973] 92 ITR 173 (Delhi); (4) CIT v. Associated Cement Companies Ltd. [1979] 118 ITR 406 (Bom). For the subsequent ass ..... X X X X Extracts X X X X X X X X Extracts X X X X
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