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2007 (2) TMI 355 - AT - Income TaxDeductions u/s 80-IB - New industrial undertaking - second hand machinery in excess of 20% of its total investment in plant - HELD THAT:- It is not the case of the revenue that this second hand machinery was required to achieve its capacity of production. As seen from the statement of facts before the CIT(A), the assessee decided to purchase the platter machine to meet the additional requirement of its major customer M/s. Cipla. This fact has not been controverted by the revenue. Thus as rightly held by the CIT(A) in his order, it is not the intention of the Legislature that even after the formation of the industrial undertaking, it should not purchase any second hand machinery to meet its future demands. The only prohibition is against the formation of the industrial undertaking using the second hand machinery. In this view of the matter, we are not inclined to interfere with the order of the CIT(A). Further the Delhi High Court in the case of Orissa Cement Ltd. v. CIT [1992 (11) TMI 80 - DELHI HIGH COURT] while dealing with deduction u/s 80J and the conditions precedent u/s 80A(4)(ii) has held that second hand machinery purchased from another party was new as far as the assessee is concerned and therefore the condition was fulfilled making the assessee entitled to deduction even without the help of Explanation 2 to section 80J(4). This view has further been reiterated by the Delhi High Court in the case of CIT v. Orissa Cement Ltd.[2001 (12) TMI 52 - DELHI HIGH COURT]. In the result, appeal of the revenue stands dismissed.
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