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2019 (2) TMI 1464 - ITAT CHENNAIClaim of deduction u/s. 80IA - splitting up or reconstruction of a business already in existence - Condition to employ more than ten persons - satisfaction of three of the sub clauses namely clauses (i), (ii) and (v) of the Sub Section (2) - assessee was producing movies sine Nineteen Eighties and production of a new movie - scope of amendment to act - HELD THAT:- As clearly held in the case of Jyoti Prakash Dutta [2014 (9) TMI 362 - BOMBAY HIGH COURT] that an assessee which was a film production unit, and which was not founded by transfer to a new business any machinery or plant previously used for any purpose, was entitled for deduction u/s.80IB of the Act. Conditions stipulated in Sub Section (2) of both the Sections(80IA & 80IB) are more or less pari materia- No doubt, the judgment was rendered by the Hon’ble Bombay High Court in the context of Section 80IA of the Act Section 80IA of the Act was substituted by Sections 80IA and Section 80IB by Finance Act, 1999 w.e.f. 01.04.2000. The block assessment period for which this appeal relates is 01.04.1986 to 30.01.1997, and the applicable law is Section 80IA of the Act as it stood before 01.04.2000. Therefore we cannot say that ld. CIT(A) fell in error in applying the judgment of Hon’ble Bombay High Court in the case of Jyoti Prakash Dutta (supra), which was in relation to section 80IB. Production of a cinema film would amount to manufacturing or processing of goods- The project of the assessee on which it had claimed deduction u/s.80IA of the Act was not formed by splitting up or reconstruction of a business already in existence. Assessee was running a production house and each new project for a new film, in our opinion cannot be considered as split up or reconstruction of the business already in existence. It may be true that assessee had used machinery already available with it, alongwith hired machinery for the new film project. However, nothing has been brought on record by the Revenue to show that there was any transfer of used machinery or plant to a new business. That production of a cinema film would amount to manufacturing or processing of goods has been clearly spelt out by CBDT in Circular No.24 (F. No.6/22/68-IT (A-I), dated 23.07.1969. Condition to employ more than ten persons - regular employees - Coming to the question whether assessee had employed more than ten persons, admittedly, list mentioned by the ld.AO at para 3 (i) of this order clearly indicate that there were more than ten persons working for the film project. Just because such persons, were not regular employees of the assessee, would not mean that they were not employed by the assessee for the purpose of new production project. In the circumstances, we are of the opinion that ld. CIT(A) was justified in allowing the claim of deduction under Section 80IA - Decided against revenue
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