9911796707
TMI Blog1987 (2) TMI 29X X X X Extracts X X X X X X X X Extracts X X X X ..... ee-company commenced its production in the year 1960 in the manufacture of foam using the prepolymer foam system. On June 1, 1963, a fire broke out in the assessee's business premises and the entire building, plant and machinery were reduced to ashes and the whole factory had been destroyed. The company thereafter obtained a fresh licence on December 21, 1963, and entered into a new agreement with the Andhra Pradesh State Electricity Board for the supply of power and obtained a fresh connection. The company approached the Controller of Imports and Exports and obtained a licence to import machinery. After the machinery was imported, new plant and machinery with a capital outlay of Rs. 3,50,000 was installed. Though, in the first instance, a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iew of the Income-tax Officer is clearly supportable from the facts in this case. The plant was established on the old site and the nature of the product is the foam. Though new machinery was installed, since the product is the same, namely, manufacture of foam, it is only reconstruction after the fire accident attracting sub-section (4)(i) of section 80J of the Act to the facts in this case. Therefore, the Tribunal committed a grievous error of law in according rebate in the computation under section 80J(1) of the Act. We are unable to agree. The facts as set out hereinbefore are not in dispute. As a matter of fact, the Appellate Assistant Commissioner and the Tribunal have concurrently found these facts. From the above stated facts, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd Rubber Co. Ltd. [1959] 35 ITR 662, wherein it was held thus (p. 671): "Now fully appreciating the distinction which counsel for the Revenue has sought to make between the case of a reconstruction of a company and the case of reconstruction of a business, these observations, as we read them, are equally illuminating in the context of reconstruction of a business already in existence in the case of a newly established industrial undertaking. " This view was approved by their Lordships of the Supreme Court in Textile Machinery Corporation Ltd. v. CIT [1977] 107 ITR 195. Goswami J., speaking for the court, while considering section 15C of the Indian Incometax Act, 1922, which is the same as sub-section (4)(i) of section 80J of the Act he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cted to produce the same or distinct goods by preservation of the old one to continue the old undertaking in the altered form so that the persons carrying on the business will substantially do the same or similar business. Then only it must be held that it is a reconstructed old business and be denied the deduction of 6% of the profits or gains as rebate from the gross total income of the previous year relevant to the assessment year on the capital employed in the new industrial undertaking. Applying the above principles, the facts not found are that the assessee's factory was gutted to ashes in a fire accident. Thereafter, there was a cessation of production of prepolymer foam. In the year 1963, the assessee obtained new export and import ..... X X X X Extracts X X X X X X X X Extracts X X X X
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