9911796707
TMI Blog1982 (2) TMI 46X X X X Extracts X X X X X X X X Extracts X X X X ..... The facts giving rise to this reference, briefly stated, are that the respondent-assessee had purchased a cold storage plant which business was being run under the name and style of M/s. Shankar Industries, Faizabad Road, Lucknow, on February 1, 1970. The purchase price was Rs. 1,44,647, the details of which were as under: Rs. 1. Land 6,000 2. Building 69,347 3. Machinery 69,300 -------------------------- Rs. 1,44,647 -------------------------- After purchasing this cold storage plant, the assessee started its reconstruction from September 1, 1970. The cost of the new construction came to Rs. 2,00,421, excluding the cost of land. Some material of the old building was also utilised in making this construction. As f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... view that it was not case which could be reviewed under s. 263 of the Act because the assessee had furnished all the relevant materials and details at the time of the assessment itself before the ITO. Apart from this, the assessee filed the details of the sale of the old machinery as also of the total investment in the new cold storage. The entire investment came to Rs. 2,39,939. The Appellate Tribunal also accepted the assessee's contention that the assessee had sold old machinery of the value of Rs. 38,880. It purchased new machinery of the value of Rs. 63,963 and utilised old machinery of the value of Rs. 15,000. Thus, in the opinion of the Appellate Tribunal, the old assets utilised were below 20 per cent. of the total assets of the ne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able income remains. Now, it is sub-s. (4) of this section which is relevant for our purposes. That sub-section, in so far as it is relevant for our purposes, reads as under : " (4) This section applies to any industrial undertaking which fulfils all the following conditions, namely: (i) it is not formed by the splitting up, or the reconstruction, of a business already in existence (ii) it is not formed by the transfer to a new business of machinery or plant previously used for any purpose ; (iii) it manufactures or produces articles, or operates one or more cold storage plant or plants, in any part of India, and has begun or begins to manufacture or produce articles or to operate such plant or plants, at any time within the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ence. The case is of reconstruction. The term " reconstruction " implies that the identity of the business should not be lost, and substantially the same business should be carried on by substantially the same persons. If the business is sold or if its very nature is changed, it will not be a case of reconstruction. In the present case the business already in existence was sold and substantial expansion and extension has been made by the assessee therein. Another finding is that the total value of the machinery and material of the old plant does not exceed 20 per cent. of the total value of the machinery and material used in the new business. In CIT v. Indian Aluminium Co. Ltd. [1973] 88 ITR 257 (Cal), a substantial expansion or extension o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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