9911796707
TMI Blog1991 (7) TMI 124X X X X Extracts X X X X X X X X Extracts X X X X ..... came into existence as a result of splitting up of the existing business of the firm of M/s. Gujarat Industrial Corporation (GIC). The firm GIC came into existence by an instrument of partnership executed amongst 4 partners of that firm on 30th July, 1973. According to the said partnership deed, the firm intended to manufacture agricultural tools and impliments, oil mill machineries and spare parts etc. During the previous year relevant to assessment year 1979-80, there was a change in the constitution of the said firm. The name of the firm was changed to M/s. Marine Industries and the firm extended the scope and sphere of its business activities by making an addition of doing business of manufacturing of steel and iron nails, windows, door ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... regarded as a splitting up of business already in existence. The new firm has been set up for entirely a new business of boat building which was not done by old firm. He, therefore, allowed the assessee's appeals for all these years. 4. Before us, the learned Sr. D.R. contended that the land and superstructure constructed thereon were admittedly transferred by the old firm in favour of the assessee-firm. The provisions of section 80J(4)(i) clearly provide that such an industrial undertaking should not be formed by splitting up or reconstruction of a business already in existence. Similar words have been used in section 80HHA(3)(ii). Since the original assessment orders were passed by the ITO by overlooking these provisions, it was an app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... only the land and incomplete building constructed thereon was transferred by the old firm to the new firm. The said incomplete building was never used by the old firm for its business activities. The assessee firm acquired entirely new plant and machinery. It is engaged in the business of manufacturing and selling boats and ships and in giving boats and ships on hire, while the other old firm M/s. Marine Industries (old name GIC) has all along been carrying on the business of manufacturing and selling machinery, spare parts of agricultural equipments, oil engines, water pumpset, pulley propeller and other machinery parts and foudry work. The business of the assessee firm was new and distinct. It is registered as a separate SSI unit. In vie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of section 80HHA have been introduced with a view to setting up and growth of new small scale industrial undertakings in the notified rural areas. These provisions should be interpreted keeping in mind these national objectives for the fulfilment of which these provisions have been introduced. It will also be relevant to consider the legislative amendments made from time to time in the provisions of section 80J. Prior to amendment by the Finance Act, 1975 w.e.f. 14-1976 one of the conditions for grant of deduction under section 80J was that the industrial undertaking should not be formed by the transfer to a new business of a building (not being a building taken on rent or lease), machinery or plant previously used for any purpose. The word ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all-scale industries in the rural area. This object is achieved even if a new industrial undertaking is established by the persons who are already engaged in the allied business. To reject the claim of such concessions of the persons who are already in that line of business on the narrow ground that the establishment of the new industrial unit is merely a result of splitting up of their existing business without taking into consideration the nature of the old existing business and the nature of business of the new industrial unit which manufactures entirely new items with entirely new plant and machinery, would result in defeating the very object with which these provisions were introduced. The concept of splitting up of a business already ..... X X X X Extracts X X X X X X X X Extracts X X X X
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