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2016 (2) TMI 262 - AT - Income TaxAllowability of deduction u/s 80IA - Held that:- We find that the assessee company commenced a distinct industrial undertaking for the generation of power. It is an undisputed fact that the premises of this undertaking are distinct from the paper unit as separate building was constructed vide approval No.TM/9997/6 dated 4.4.2001 issued by the Chief Inspector of Industries, Chennai, at S.F.No.279, 277, 278 and 276 at Nallur Village, Pushpathur Panchayat, Palan Taluk, Dindigul District. Separate technology is used and loan was also obtained from Lakshmi Vilas Bank, Udumalpet Branch. The lower authorities are not correct in holding that the power plant was not a distinct unit. The true principle as laid down in the case of Textile Machinery Corporation Ltd., Vs. CIT [1977 (1) TMI 3 - SUPREME Court] directly and squarely applies to the facts of the case. In the instant case, the true test is not whether the new industrial undertaking connotes expansion of the existing business of the assessee but whether it is all the same a new an identifiable undertaking separate and distinct from the existing business of the assessee but whether it is all the same a new and identifiable undertaking separate and distinct from the existing business. For the assessment years 2007-08 and 2008-2009, the lower authorities for co-generation plant granted deduction u/s.80IA of the Act. They impliedly agreed that the new machinery and plant have been installed under separate premises and it is not appropriate to deny the same deduction for the assessment year 2009-2010. To constitute reconstruction, there must be transfer of assets of the existing business to the new industrial undertaking. In our opinion, generation of power unit is separate and distinct undertaking for which separate approval was obtained and it cannot be said that splitting of existing business structure. Therefore, in our considered opinion, the lower authorities are not correct in denying the deduction under section 80IA of the Act - Decided in favor of the assessee
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