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TMI Blog2014 (7) TMI 251X X X X Extracts X X X X X X X X Extracts X X X X ..... ommon effective ground taken by assessee is as under:- "3. On appreciation of the facts and circumstances of the case and interpretation of law, the Ld. CIT(A) has erred in confirming the action of the Ld. AO in not granting deduction u/s. 80IB of the Act from the profits and gains of the appellant on the basis that the industrial undertaking is formed by reconstruction of a business already in existence. The action of the Learned Commissioner of Income Tax (Appeal) is based on presumptions and surmises, and is contrary to the facts and circumstances of the case and deserves to be deleted." 4. During the assessment proceedings AO observed that assessee company's Industrial Undertaking has been formed by splitting up or reconstruction. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion u/s. 80IB of the Income Tax Act. Therefore appeals of the assessee are also required to be allowed. Ld. DR however relied on the orders of lower authorities. 8. After hearing both the parties and perusing the record, we find that the issue is now covered in favour of assessee and against the revenue by the decision of Hon'ble ITAT in assessee's own case for the assessment year 2005-06 wherein following was held:- "8. Having heard the submissions of both the sides, we are of the view that now, this issue is covered by the decision of Coordinate Bench. In this regard, the facts narrated by the assessee about the new unit are as follows:- "Industrial undertaking consists of land, building, plant and machinery and other equipments. In th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of any other undertaking has been broken up so as to form our undertaking. 9. On the basis of the facts and evidences placed on record, we hereby hold that the unit in question has not been formed either by splitting up or by reconstruction of a business. There was a new independent location where new plant and machinery was stated to be installed. Whether the assessee carried the same business or different business was of no consideration as it was done by the revenue authorities. Rather the revenue authorities were not justified in treating the existence of new unit as a reconstruction of old unit. In the case of M/s. Computer Force (supra) wherein elaborately discussed term used 'splitting up' or 'reconstruction'. We have n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion or it has stopped activities may give rise lo an impression that the new unit is the reconstruction of business already in existence. But earning on the same business in the new unit is not sufficient at its own to hold that the new unit is a reconstruction of business already in existence unless location is the same and there is no installation of new plant and machinery. The old unit may stop functioning immediately or after sometime. If old unit runs parallel for some time and thereafter it stop functioning then it is not going to make any difference. One cannot say that if old unit stops functioning immediately on the start of new unit it would be a case of reconstruction and if old unit stops functioning after a year or so, after t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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