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TMI Blog2008 (2) TMI 283X X X X Extracts X X X X X X X X Extracts X X X X ..... Shah with Manish J. Shah for the assessee. JUDGMENT The Judgment of the court was delivered by D. A. MEHTA - 1. The Income Tax Appellate Tribunal, Ahmedabad Bench-C, has referred the following question for the opinion of this Court under sec. 256(1) of the Income Tax Act, 1961 (the Act) at the instance of the Commissioner of Income Tax. "Whether on the facts and in the circumstances of the case the Tribunal was justified in holding that assessee was entitled for the deduction as claimed by it under section 80-I of the Act ?" 2. The Assessment Years are 1982-83, 1983-84. The relevant accounting periods are calender years ended on 31.12.1981 and 31.12.1982, respectively. The assessee, a public limited company, claimed deduct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ort, it would appear that the assessee company has installed only 2 additional assembly lines during the year for the manufacture of Um-1 and Um-3 types dry cell batteries (which were being manufactured in earlier years also) and, these assembly lines certainly cannot manufacture any dry cell batteries on their own unless the material is fed into them from Zinc section and Electrolytes sections etc. Thus, it is clear that the new assembly lines are depending very much on the earlier existing facilities like Zinc and Electrolyte section and other utilities viz. Air, Water, Gas and Electricity generator etc. and they are not capable of functioning on their own without seeking assistance from the old facilities." 4. The assessee carried th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 985) 156 ITR 463 (Raj.) (3) Khoday Industries P. Ltd. v. CIT (1987) 163 ITR 646 (Karn.) (4) CIT v. Travancore Rayons Ltd. (1987) 164 ITR 134 (Ker) 6. On behalf of the respondent-company Mr JP Shah learned advocate has submitted that the Tribunal has recorded various findings of fact after appreciating the evidence on record and in light of the said findings of fact on application of settled legal principles, no interference was warranted in the impugned order of Tribunal. Learned advocate has invited attention to the following four decisions: (1) Textile Machinery Corporation Ltd. v. CIT (1977) 107 ITR 195 (SC) (2) CIT v. Indian Aluminium Co. Ltd. (1977) 108 ITR 367 (SC) (3) CIT v. Shree Digvijay Cement Co. Lt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of March, 1981, or such further period as the Central government may, by notification in the Official Gazette, specify with reference to any particular industrial undertaking; (iv) in a case where the industrial undertaking manufactures or produces articles or things, undertaking employs ten or more worker in a manufacturing process carried on with aid of power, or employs twenty or more workers in a manufacturing process carried on without the aid of power: Explanation 2 : Where in the case of an industrial undertaking, any machinery or plant or any part thereof previously used for any purpose is transferred to a new business and the total value of the machinery or plant or part so transferred does not exceed twenty per cent of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cerned, it is not even revenue's case that there is any violation of the said two conditions. In so far as condition nos. (i) and (ii) are concerned, when one reads the assessment order, it becomes clear that though not stated clearly it is not revenue's case that the industrial undertaking is formed by splitting up, or reconstruction, of a business already in existence. Mr. Parikh accepted this position. That leaves only condition no. (ii) to determine whether the assessee is, or is not, entitled to relief under sec. 80-I of the Act. The said condition vide clause(ii) places an embargo in case of an industrial undertaking which is formed by the transfer, of machinery or plant previously used for any purpose, to a new business. In fact, dur ..... X X X X Extracts X X X X X X X X Extracts X X X X
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