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TMI Blog1990 (6) TMI 91X X X X Extracts X X X X X X X X Extracts X X X X ..... tory at Dewas, manufacturing the same items, i.e., glazed tiles which it was manufacturing in its original factory at Bombay. The assessee claimed that it was established to claim the benefits of backward area. Consequently, the assessee had claimed deductions under sections 80-I and 80HH. The production is alleged to have commenced on 8-10-1981. The claim for the first time for deductions u/ss. 80-I and 80HH was made for the assessment year 1982-83. The then IAC after detailed scrutiny of all the documents placed before him had concluded that the deduction under these sections was allowable but due to inadequacy of profits, the same was disallowed. The claim of the assessee was disallowed this year on the ground that the factory at Dewas w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpanies Ltd. [1979] 118 ITR 406, the assessee was entitled to its claim u/ss. 80-I and 80HH. On the other hand, the learned Departmental Representative relied on the order of the learned CIT(A). 4. We have heard the parties at length and also perused the entire facts on record. In this case, it is not disputed that there was a unit for manufacturing glazed tiles etc. at Dewas. It was established by the assessee-company and complete new machinery was fixed up in the said project. Section 80HH of the IT Act, which entitles the assessee for a deduction in profits and gains from newly established industrial undertaking in a backward area, prescribes the following conditions : (1) The new unit has begun or begins to manufacture or produce a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rially recognizable unit of an assessee cannot be said to be construction of his old business. Under such circumstances, the benefit cannot be denied merely because the new undertaking goes to expand the general business of the assessee in some direction. In another case of Indian Aluminium Co. Ltd., the Hon'ble Supreme Court had held in favour of the assessee. Briefly the facts of the east were that the assessee was a manufacturer of aluminium ingots from ore. He had 4 manufacturing centres at Belur, Kalwa, Alupuram and Hirakud. In the accounting year, the assessee established one more centre at Muree and also made extension to the existing centres at Belur and Alupuram by installing new plant and machinery over there. The ITO refused t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecision of the Bombay High Court in the case of CIT v. Associated Cement Companies Ltd. [1979] 118 ITR 406 and of the Supreme Court in the case of CIT v. Indian Aluminium Co. Ltd. [1977] 108 ITR 367. The common theme of both the decisions is that the establishment of a new industrial undertaking as part of an already existing industrial establishment may result in an explanation, but if the newly established unit is itself an integrated independent unit in which new plant and machinery is put up and is itself, independent of the old unit capable of production of goods, then it could be classified as a newly established industrial undertaking. Therefore, I hold that the assessee is entitled to benefits of deduction under sec. 80-I and 80HH s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mendment in the Sales-tax Act, to the effect that the sales tax deferred under the scheme shall be treated as actually paid, such a deeming provision will meet the requirements of sec. 43B. The assessee has filed an alleged amendment of sec. 18 of the Madhya Pradesh General Sales Tax Act, at p. 6 of the compilation in which it has been provided that such deferment of sales tax shall be deemed to have been paid in accordance with the provisions of sub-sec. (2) or sub-sec. (3) or sub-sec. (4) as exempt. Both these papers clearly go to suggest that even the CBDT had held that such deferment of sales tax, if deemed to have been paid, will not be hit by sec. 43B. With these papers on the file, we are of the opinion that the sales-tax collections ..... X X X X Extracts X X X X X X X X Extracts X X X X
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