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TMI Blog2017 (11) TMI 1685X X X X Extracts X X X X X X X X Extracts X X X X ..... 17 - Mr. K.S. Jhaveri And Mr. Vijay Kumar Vyas JJ. For the Appellant(s) : Mr. Sameer Sharma with Mr. Gaurav Gaur for Mr. Anil Mehta JUDGMENT 1. An application (39397/2017) has been filed in ITA No.296/2017 for dispensing with filing of the certified copy of the order dt.28.4.2017 on the ground that the same has been filed in ITA No.294/2017. For the reasons mentioned in the application, the same is allowed. Other defects are waived. 2. In both these appeals common question of law and facts are involved hence they are decided by this common judgment. 3. By way of these appeals, the appellant has assailed the judgment and order of the tribunal whereby tribunal has dismissed the appeal of the department and confirmed the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8 of Smt. Kamlesh Dangayach. 5.2 It has been noticed that during the AY 2007-08, the assessee firm received total capital of ₹ 37,00,000/- out of which ₹ 27,00,000/- has been received from M/s. Green Fire, proprietorship concern of Smt. Kamlesh Dangayach. From the perusal of last year s capital account obtained from previous assessment records of M/s. Green Fire, it is clear that there has been a direct intake of capital from it to M/s Green Fire Exports. Thus, it is clear that the new unit in the name of M/s. Green Fire Exports has not been formed out of new funds, but it merely reflects shift of money from the original business i.e. M/s. Green Fire to the new one. 6. Now the issue is squarely covered by the decision o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assets in its commercial sense. So long as the assets appearing in the balance sheet of old concern are not shofted to new unit but lying as it is, it cannot be a case of reconstruction of business. The purchasing or selling may be common but it cannot amount to reconstruction of old business. The Hon ble S.C. in the case of Textile Machinery Corp. Ltd. vs. CIT(relied upon by the AO) has held that reconstruction of business involves substantially the same person carrying on substantially the same business but at the same time has also held that where the new industrial undertaking is separate and independent production unit and the undertakings can be carried out separately without complete absorption of identity of the old business they ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder: 4.7. The Hon ble Apex Court in the case of Textile Machinery Corporation ltd. (supra) has also approved the observations of the Hon ble Bombay High Court in the case of CIT v/s Gaekwar Foam. And rubber company ltd. 35 ITR 662 The Hon ble Bombay High court has held that reconstruction of business or industrial undertaking must necessarily involve the concept that the original business or undertaking do not cease functioning and its identity is not to be lost or abandoned. The underlying idea of a reconstruction is of a business already in existence - there must be a continuation of the activities and business of the same industrial undertaking. The undertaking must continue to do same business though in some altered or varied for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nstruction of the old business. Establishment of the new unit with new separate plant and machinery by investing substantial funds is essential. If the new unit has not derived any thing foom the old unit by way of equipment or by way of factory building and no assets of the old unit have been transferred to the new unit, the new unit had not been formed by reconstruction. We feel that the ld. AR in his written submission has rightly placed reliance on the followings decisions that the new undertaking is not a formed on reconstruction of the business already in the existence. 1 CIT V/s Ambur Cooperative Sugar Mills Ltd. (Madras) 127 ITR 495. 2 Addl. CIT V/s Hutti Gold mines Company Ltd. 128 ITR 476 (Karnataka) In this case existing pl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... interest in old unit, even then the new unit can not be considered a reconstruction of old business as new unit if independent is not to be considered as reconstruction of business. 8. We have heard counsel for both the sides. 9. Taking into consideration the conclusion reached by the Tribunal and CIT(A), we are of the opinion that the conclusion reached by the Tribunal after relying upon the decisions of Delhi High Court in the case of CIT vs. Mahaan foods Ltd. 216 CTR 148, the Madras High Court in the case of CIT vs. Premier Cotton Mills Ltd. 240 ITR 434 and the Allahabad High Court in the case of CIT vs. Quality Steel Tube Ltd. 280 ITR 254, is just and proper and no interference in the order of the Tribunal is called for. 7. H ..... X X X X Extracts X X X X X X X X Extracts X X X X
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