TMI Blog1995 (9) TMI 288X X X X Extracts X X X X X X X X Extracts X X X X ..... on record, we are satisfied that unit No. 2 did meet these requirements, and so, exemption could not have been denied, by taking a view that unit No. 2 was not a new industry, because of what has been stated in clause (i) of the clarification. - Civil Appeal No. 8257 To 8260 of 1995, W.P. Nos. 4190, W.P. Nos. 2216 of 1983, - - - Dated:- 12-9-1995 - RAMASWAMY K. AND HANSARIA B.L. JJ. Dr. A.M. Singhvi, Senior Advocate (Sunil Dogra, Ms. Monica Sharma and S.S. Shroff, Advocates, with him), and S. Ganesh, Ravinder Narain, Ms. Amrita Mitra and Rajan Narain, Advocates, for the respondents. K. Madhava Reddy, Senior Advocate (V.B. Joshi, Umesh Bhagwat and Alok Singh, Advocates, with him), for the appellant. -------------------- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xemption, as visualised by the resolution in question. The High Court granted the prayer. Hence these appeals. 2.. The only ground on which exemption was sought to be denied to the respondents in the proceeding before the High Court was that the importation of plant and machinery for setting up of the units being by existing undertakings, the same was not meant for "new industrial undertaking". This stand was taken because of clarification (i) appended to the resolution, according to which, an industry would not be a "new industry" which is formed by splitting up or reconstruction of a business already in existence. A perusal of the impugned judgment of the High Court makes this stand on behalf of the appellants abundantly clear inasmuc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a number of decisions. The first in point of time is by a three Judge Bench in Textile Machinery Corporation Ltd. v. Commissioner of Income-tax [1977] 2 SCR 762; [1977] 107 ITR 195 (SC). There, the court was seized with the question whether exemption from income-tax granted by section 15C of the Indian Income- tax Act, 1922, was available to the appellant. The section as it stood at the material time, granted exemption, inter alia, to any industrial undertaking which "is not formed by the splitting up, or the reconstruction of, business already in existence......" It would thus be seen that the language of clarification (i) of resolution No. 63 is in pari materia with the language of section 15C which had come up for interpretation in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... satisfied that unit No. 2 had been set up to effect substantial expansion of the existing business. That, however, is not decisive in view of the aforesaid decision, which was followed in Commissioner of Income-tax v. Indian Aluminium Co. Ltd. [1977] 108 ITR 367 (SC) and Commissioner of Income-tax v. Orient Paper Mills Ltd. [1989] 176 ITR 110 (SC). We have said so, because according to these decisions, if the new undertaking by separate and independent production units were to come in existence in the sense of producing a distinct commercial product and the undertaking could be carried on separately, the same would not be treated as being formed by reconstruction of the old business. From the material on record, we are satisfied that unit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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