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2012 (8) TMI 552 - AT - Income TaxDisallowance of deduction u/s 54G - CIT(A) deleted it - Held that:- As the plant and machinery was very old, assessee sold them immediately but, for surrendering the tenancy rights it took sometime as it was engaged in negotiations with the lessor and after protracted negotiations, it cannot be said that the industrial undertaking ceased to exist on sale of the plant and machinery. The process of shifting commenced with the sale of plant ad machinery and continued till the rights in the leasehold premises were surrendered on which capital gains accrued to the appellant. The requirement of section 54G is that where u/s 54G(1)(a), the requirement is that the new machinery or plant has to be purchased for the purposes of the business of the industrial undertaking, section 54G(1)(b) merely requires that the acquisition of building or land or construction of building should be for the purposes of its business in such non urban area - thus section 54G permits the use of capital gains for acquiring land or building or constructing building for the purposes of (any) business in the non-urban area therefore, it can be interpreted that assessee should carry on any business in non urban area and if the amounts are utilized for acquisition of assets for the purpose of its business, this should qualify for the purpose of exemption u/s 54G as there is no requirement that the land and building should be used for the purpose of the business of industrial undertaking - in favour of assessee.
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