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TMI Blog2022 (9) TMI 931X X X X Extracts X X X X X X X X Extracts X X X X ..... , 2006, the Company moved its operations from Baddi to Shimla and started its operations at Unit-II at STPI Building, Block No. 24, SDA Complex, Kasumpti, Shimla. In the Financial Year 2009-10, the assessee-company extended its business operations and used the space available at its registered office at Altruist Mount, Behind Hotel Firhill, near Tunnel 103, Shimla. This has been claimed by the assessee as Unit-III in its submissions filed during the course of assessment proceedings as per information in Form No.10CCB, first Assessment Year for the Unit-II for claim of deduction u/s 80IC was Assessment Year 2006-07 and first Assessment Year for Unit-III for claim of deduction u/s 80IC was Assessment Year 2010-11. 3. The Assessing Officer, vide its order (Annexure P-1), came to the conclusion that the assessee was not entitled to claim any benefit under Section 80-IC of the Act as Unit-III was not a new Unit and it was reconstruction of an existing Unit-II. 4. Aggrieved against the orders passed by the Assessing Officer, assessee filed appeal before the Commissioner of Income-tax (Appeals), Shimla. 5. The Appellate Authority also came to the conclusion that the assessee was not en ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (1992) 3 SCC 78, wherein, it was held as under:- "9.Initial exercise, therefore, should be to find out if the undertaking was new. Once this test is satisfied then clause (1) should be applied reasonably and liberally in keeping with spirit of Section 15-C (1) of the Act. While doing so various situations may arise for instance the formation may be without anything to do with any earlier business. That is the undertaking may be formed without splitting up or reconstructing any existing business or without transfer of any building material or plant of any previous business. Such an undertaking undoubtedly would be eligible to benefit without any difficulty. On the other extreme may be an undertaking new in its form but not in substance. It may be new in name only. Such an undertaking would obviously not be entitled to the benefit. In between the two there may be various other situations. The difficulty arises in such cases. For instance a new company may be formed, as was in this case a fact which could not be disputed, even by the Income Tax Officer. But tools and implements worth Rs.3,500 were transferred to it of previous firm. Technically speaking it was transfer of material u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , plant or machinery but it is not formed as a result of such transfer the assessee could not be denied the benefit." 11. Learned counsel for the assessee-company, has further placed reliance on a decision rendered by the Hon'ble Supreme Court in case titled "Textile Machinery Corporation Ltd., versus Commissioner of Income Tax", reported in Income Tax Reports Vol.107 (1977) at page No.195, wherein, it was held as under:- "Page 206. ...Reconstruction of business involves the idea of substantially the same persons carrying on substantially the same business. It is stated on behalf of the Revenue that the same company in the instant case continues to do the same business of heavy engineering---no matter certain spare parts necessary as components to completion of the end-product are now manufactured in the business itself. The fact that the assessee is carrying on the general business of heavy engineering will not prevent him from setting up new industrial undertakings and from claiming benefit under section 15C if that section is otherwise applicable. However, in order to be entitled to the benefit under section 15C, the following facts have to be established by the assessee, sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies Centre, Shimla No.02/011/21/00038, dated 30.3.2007 No.02/11/21/00256 effective from 31.12.2009 Date of Commencement of Production 21.09.2005 31.12.2009 Initial A.Y. u/s 80-IC A.Y. 2006-07 A.Y.2010-11 Accounts Books Separately maintained and duly audited Separately maintained and duly audited Investment in Computers (being primary plant & machinery) in A.Y. 2010-11 45,16,158/- 76,15,962/- (100% new purchases with no transfers form Unit-II) Attributable profits 20,85,23,896/- 1,06,90,722/- No. of employees as of date of formation of Unit-3. 175 employees 27 employees UNIT-II Clients Unit II - invoiced amount (Rs.) Bharti Airtel 173825288 Bharti Airtel - Shimla 1108148 Bharti Airtel - Mohali 5820103 Bharti Airtel - Kolkata 125176 Bharti Airtel - Delhi 1428765 Idea Cellular Ltd 11223942 MTNL-Delhi 3865460 RCIL-Mumbai 121567046 Tata Teleservices Ltd., Mumbai 25859599 Total 34,38,23,527 UNIT-III Clients Unit III - invoiced amount (Rs.) Aircel Lad 1061050 Hungama Debtor 4002574 MTNL-Mumbai 258361 Shotformats Digital Productions Pvt. Ltd. 1469686 AMA India Consultants Income 610786 Federation of Al ..... X X X X Extracts X X X X X X X X Extracts X X X X
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