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2012 (3) TMI 267 - HC - Income TaxDeduction u/s 80-I - assessee engaged in the business of manufacturing caustic soda primarily and other chemicals – incurred expenditure of 7.5 crore towards substantial expansion and bringing into effect new industrial undertaking – production capacity increased from 37245 M.Tonnes to 70425 M.Tonnes – Revenue denied deduction u/s 80I on ground that it is expansion of the same manufacturing unit – Held that:-The fact that an assessee by establishment of a new industrial undertaking expands his existing business which he certainly does, would not on that score deprive him of the benefit u/s 80-I. Every new creation in business is some kind of expansion and advancement. The true test is not whether the new industrial undertaking connotes expansion of the existing business of the assessee but whether it is a new identifiable endeavour where substantial investment of fresh capital is made to enable earning of profit attributable to that new capital. Only because to a certain extent the new undertaking is dependent on the existing unit, will not deprive the new undertaking the status of a separate and distinct identity. See Textile Machinery Corporation Ltd. v. CIT (1977 - TMI - 6503 - Supreme Court) – Relief u/s 80I to be granted – Decided in favor of assessee.
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