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TMI Blog2018 (10) TMI 1524X X X X Extracts X X X X X X X X Extracts X X X X ..... l undertaking, the number of building is wholly irrelevant. As all these units together constituted separate and distinct industrial undertaking eligible for deduction under section 80IB. There is no dispute that, vide registration dated 3rd June 2001, District Industries Centre has confirmed setting up of unit at “No.47 New Grain Market, Opp. Anupam Talkies, Khokhra, Ahmedabad” for production of “Readymade garments for children”. As for the statement made by the partners of the assessee firm, all that has been stated in the said statement is that the activities are carried out at other places as well but then none of these activities were independent activities on standalone basis or resulted in a distinct product. In any event, as is t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessment year 2002-03 onwards, in respect of profits of this business. On 12th October 2009, the assessee was subjected to survey proceedings under section 133A, and based on certain findings in the said survey proceedings, the assessments, including for this assessment year, were reopened. In the course of these reassessment proceedings, validity of which has been upheld by the learned CIT(A) and is not challenged before us, the Assessing Officer noted that the deduction under section 80IB was granted on the basis that the assessee has started a new industrial undertaking at Plot No.47, New Grains Market, Khokhara, Ahmedabad but then, as stated by the Assessing Officer, no separate books of accounts were maintained for the said undertakin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e only in respect of the new undertaking but then since the assessee has not maintained separate books of accounts for activities at the new premises, deduction could not be allowed. It was stated that under rule 10BBB(3), profits of the undertaking were to be computed as if it is a distinct entity. The Assessing Officer thus concluded that the assessee was not eligible for deduction under section 80IB in respect of profits from manufacturing of children s garments as the activities were also carried out in other locations and as no separate books of accounts were maintained for each location. Accordingly, the 80IB deduction of ₹ 67,15,507/- was declined. Aggrieved, assessee carried the mater in appeal before the learned CIT(A) who r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e that appellant started new industrial activity in this area only in 2001. Appellant submitted that unit number 47 was mentioned as new industrial undertaking just for the sake of convenience and because main activity of stitching was carried out at this place. All other ancillary activities were carried out in other units in the same area. It is also not in dispute that appellant was manufacturing children's garments in the new industrial undertaking which consisted several units as mentioned in assessment order and appellant's submission. Different activities were performed in these units and the final product i.e. children's garment was coming out. Unit 47 handled stitching activity. Remaining activities till marketing are c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ontain several new industrial undertakings if the building is large enough. Therefore to determine a new industrial undertaking, number of buildings is not relevant. What is relevant is separate and independent industrial undertaking constituting all the activities of the undertaking. Appellant started its new industrial undertaking for manufacturing children's garments by using several buildings/units as mentioned in the assessment order. Each building performed part of the activity and none of the building constituted independent industrial undertaking. Therefore I agree with the appellant that it had composite new industrial undertaking with 5-6 units but the same was identified as unit number 47 for the sake of convenience. Therefor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an one unit as it s integral part. The mere fact that an industrial undertaking has more than one physical place for it s allied activities, such as storage of raw material, final touches and packing of end products or other ancillary activities would not mean that all these physical places are to be treated as standalone unit and profits for each of these places are to be computed separately. As learned CIT(A) rightly puts it, for setting up of new industrial undertaking, the number of building is wholly irrelevant. As all these units together constituted separate and distinct industrial undertaking eligible for deduction under section 80IB. We have also noted that there is no dispute that, vide registration dated 3rd June 2001, District I ..... X X X X Extracts X X X X X X X X Extracts X X X X
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