TMI Blog2010 (4) TMI 827X X X X Extracts X X X X X X X X Extracts X X X X ..... dismissed. - ITA NO. 2096 (DELHI) OF 2008 - - - Dated:- 23-4-2010 - SHRI G.E. VEERABHADRAPPA, AND SHRI H.S. SIDHU, JJ. Represented By: Mrs. Bationa Kaushik for the Appellant. Shri Ajay Vohra and Sachit Jolly for the Respondent. H.S. Sidhu, Judicial Member The Revenue has filed the captioned appeal against the order passed by the Commissioner of Income-tax (Appeals), Ghaziabad dated February 4, 2008 for the assessment year 2004-05 on the following grounds : (1) That the learned Commissioner of Income-tax (Appeals) has erred in law by not appreciating the facts that transfer of undertaking of individual is hit by the provisions of section 80-IB(12) of the Income-tax Act and that the deduction under section 80-IB is not allowable. (2) That the order of the learned Commissioner of Income-tax (Appeals) on the above issues being erroneous in law and on facts be set aside and that of the order of the Assessing Officer be restored. 2. At the time of hearing, learned counsel for the assessee stated that the issue in dispute is covered in favour of the assessee by the various decisions rendered by the hon'ble High Courts including the decision of hon'ble Alla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0-IB(12) because the denial envisaged in section 80-IB(12) covers undertaking of an Indian company. The provision under section 80-IB(12) stated "where any undertaking of an Indian company which is entitled to the deduction under this section is transferred . . .". Since the assessee is not a company, the assessee is not hit by the provisions under section 80-IB(12). It is also argued that the inference drawn by the Assessing Officer that had it been the intention of the Legislature to allow the benefit to assessees other than companies the same would have been mentioned in the provision under section 80-IB(12) along with company is misleading. If there is such legislative intent to deny the benefit to the assessee other than company, it has to be explicit and specific and should emanate directly from the test of the statute. Since there is neither specific mention of assessees other than company in the provision under section 80-IB(12) nor is there any mention that transfer of an undertaking owned by the assessee other than company would not be entitled to deduction under section 80-IB, the contention of the assessee appears to be logically correct. Similarly, the inference of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s also relevant to consider that the restrictive regime under section 10A(9) had in its ambit all entities, whereas the restrictive regime under section 10A(7A) has in its ambit only corporate assessee meaning thereby that in the original scheme the Legislature intended to prohibit transfer of an undertaking of all entities whereas in the modified restrictive regime covers transfer of undertaking of an Indian company only. Moreover the restrictive regime under section 10A(7A) only regulates the deduction, viz., no deduction would be admissible to the previous owner whereas the same would be admissible to the current owner. It is this context the Circular No. 7 of 2003 ([2003] 263 ITR (St.) 62) becomes relevant wherein it is stipulated that (page 78) 'As a consequence sub-sections (9) and (9A) the Explanation below thereto in sections 10A and 10B become redundant and have been omitted.' Considering the above facts once section 10A(9) has been omitted, no valid reference could be made to section 10A(9) for interpreting section 10A(7A) and no meaning from section 10A(9) could be imported/adduced to interpret section 10A(7A). Another observation of the Assessing Officer that as t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as also referred to the Judicial Dictionary by K. J. Iyer where the word 'reconstruction' is expressed by synonymous 'rebuild' and it has been argued that if there is change of ownership from one person to another but the business continued to the same it cannot be said that the undertaking is formed as a result of reconstruction. Considering the aforesaid, apparently it is seen that the appellant is not hit by the provision under section 80-IB(2)(i) and 80-IB(2)(ii). The learned authorised representative has further relied upon the decision in the case of Asstt. CIT v. IIS Infotech Ltd. [2004] 82 TTJ (Delhi) 174 wherein it has been decided that 'the benefits are always attached to industrial undertaking irrespective of the fact who owns it'. From perusal of the decision as also from the law applicable as on date specifically after the omission of section 10A(9) with effect from April 1, 2004, what clearly emerges is that the deduction is undertaking specific and not assessee specific. The learned authorised representative has further brought to the notice that the CBDT in respect of similar relief under section 84 of the Act had taken a view that the relief would be available ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e orders of the authorities below under section 80-IB, deduction is allowed to small scale industrial undertaking which begins manufacture or produce article at any time during the period beginning on April 1, 1995 and ending on March 31, 2002. As per sub-section (2), no deduction will be allowed to an industrial undertaking which is formed by splitting up or the reconstruction of a business already in existence, and that it is not formed by transfer of a new business of machinery or plant previously used for any purpose. In the instant case, the assessee-firm was engaged in manufacture of electronic durables in proprietorship capacity. However, the constitution of the assessee-firm change by admission of a partner therein. The claim of deduction under section 80-IB was filed by the assessee partnership firm in the assessment year 2005-06 which was declined by the Assessing Officer on the plea that there was a transfer of plant and machinery already in use in the business of proprietorship firm. However, there was no transfer of plant and machinery as alleged by the Assessing Officer. On the conversion of proprietorship firm into partnership firm, there was no transfer of plant and ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
