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2021 (5) TMI 20 - AT - Income TaxDenied deduction claimed u/s. 80IC - profit derived from new industrial undertaking at Haridwar on the ground that new unit at Haridwar was set up by splitting up of existing business at Chennai unit - According to the AO the assessee has split up its existing business and formed new unit, when the deduction claimed u/s.80IC was denied to M/s Arun Plasto Moulders Private Ltd., a sister concern of the assessee - AO has also denied deduction on another ground that assessee has used plant and machinery previously used for any purpose beyond the specified percentage as per Explanation 2 of section 80(IA)(3) rws 80IC - HELD THAT:- DR in light of facts brought out by the learned CIT(A) regarding investments in new plant and machinery installed at new unit at Haridwar. Even if, the plant and machinery installed at new unit is considered as on 31.03.2011, then also assessee has invested a sum of ₹ 1,82,32,810/- as on 31.03.2011 and if amount of used plant and machinery at ₹ 31,20,023/-, is considered to total investment in plant and machinery as on 31.03.2011 at ₹ 1,82,32,810/-, the percentage works out to ₹ 17.11%, which is well within the percentage specified in Explanation 2 of section 80(IA)(3) rws 80IC of the Act. Therefore, we are of the considered view that on this count also reason given by the Assessing Officer to deny deduction claimed u/s.80IC of the Act fails. Coming back to case laws relied on by the counsel for the assessee. The learned counsel for the assessee has relied upon plethora of judicial precedents in support of his arguments. The Hon’ble High Court of Delhi in the case of CIT Vs.Ganga Sugar Corporation Ltd.[1971 (3) TMI 46 - DELHI HIGH COURT] has considered an identical issue in light of the observations of the Assessing Officer of splitting up or reconstruction of business already in existence. The Hon’ble High Court in the context of provisions of section 15C of the Income Tax Act, 1922, which is similar to the provisions of section 80J of the Income Tax Act, 1961 The Hon'ble Jurisdictional High Court of Madras in the case of CIT Vs. Premier Cotton Mills Ltd, [1999 (2) TMI 41 - MADRAS HIGH COURT] has discussed in more detail the splitting up or reconstruction of already existing business in the context of deduction u/s.80J. In this view of the matter and considering case laws discussed herein above, we are of the considered view that the assessee is eligible for deduction u/s.80IC of the Act in respect of profit derived from new undertaking set up at Haridwar. CIT(A), after considering relevant facts has rightly deleted additions made by the Assessing Officer towards disallowances u/s.80IC of the Act and hence, we are inclined to uphold the findings of the learned CIT(A) and dismiss the appeal filed by the Revenue.
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