TMI Blog2007 (2) TMI 355X X X X Extracts X X X X X X X X Extracts X X X X ..... ) in his order, it is not the intention of the Legislature that even after the formation of the industrial undertaking, it should not purchase any second hand machinery to meet its future demands. The only prohibition is against the formation of the industrial undertaking using the second hand machinery. In this view of the matter, we are not inclined to interfere with the order of the CIT(A). Further the Delhi High Court in the case of Orissa Cement Ltd. v. CIT [ 1992 (11) TMI 80 - DELHI HIGH COURT] while dealing with deduction u/s 80J and the conditions precedent u/s 80A(4)(ii) has held that second hand machinery purchased from another party was new as far as the assessee is concerned and therefore the condition was fulfilled making t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT(A) on the above grounds be set aside and that of the Assessing Officer restored." 3. Brief facts of the case are that the assessee is engaged in manufacture of corrugated boxes and this is the first year of assessment. During the course of assessment proceedings the Assessing Officer noticed that the assessee has purchased one second hand cutting and creasing machine for Rs. 2,83,401 from Brown Cartons and that the value of the second hand machine exceeds 20% of the total value of the plant and machinery i.e. Rs. 9,41,601. Observing that the assessee has not fulfilled the conditions under section 80-IB he disallowed the said claim. Aggrieved, assessee filed an appeal before the CIT(A) who deleted the addition on the ground that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 80-IB(2) reads as under "Sub-section (2). This section applies to any industrial undertaking which fulfils all the following conditions, namely : ( i )it is not formed by splitting up, or reconstruction, of a business already in existence : Provided that this condition shall not apply in respect of an industrial undertaking which is formed as a result of the re-establishment, reconstruction or revival by the assessee of the business of any such industrial undertaking as is referred to in section 33B, in the circumstances and within the period specified in that section; ( ii )it is not formed by the transfer to a new business of machinery or plant previously used for any purpose;" Clause ( ii ) prohibits the use of second ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of the Legislature that even after the formation of the industrial undertaking, it should not purchase any second hand machinery to meet its future demands. The only prohibition is against the formation of the industrial undertaking using the second hand machinery. In this view of the matter, we are not inclined to interfere with the order of the CIT(A). Further the Delhi High Court in the case of Orissa Cement Ltd. v. CIT [1993] 200 ITR 636 while dealing with deduction under section 80J and the conditions precedent under section 80A(4)( ii ) has held that second hand machinery purchased from another party was new as far as the assessee is concerned and therefore the condition was fulfilled making the assessee entitled to deduction ..... X X X X Extracts X X X X X X X X Extracts X X X X
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