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2015 (4) TMI 630 - BOMBAY HIGH COURT

2015 (4) TMI 630 - BOMBAY HIGH COURT - TMI - Revision u/s 263 - whether Assessee is entitled to a deduction under Section 80I? - Held that:- When two opinions or views are available and one of the possible view is reached by the Assessing Officer, recourse to Section 263 of the Income Tax Act is not open. In order to decide whether two view on Section 80I are possible, in so far as present facts are concerned, we have to look into the express language of Section 80I which is on the subject of de .....

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es not permit benefit of deduction to be taken if the industrial undertaking is formed by splitting up or reconstruction of a business, already in existence. Clause (ii) does not allow benefit to be taken if such undertaking is formed by transfer to a new business, machinery or plant previously used for any purpose. Clause (iii) again creates a bar if the industrial undertaking manufactures any article or thing, which is not specified in the 11th Schedule. By Clause (iv), the ceiling on number o .....

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entitled to relief as contemplated under Section 80I of the Income Tax Act, upholding those findings. Other judgment of this Court reported at Cit .vrs. Anglo French Drug Co. (Eastern) Ltd) [1991 (2) TMI 63 - BOMBAY High Court] again shows a finding that the manufacturing company need not manufacture the goods by its own plant and machinery, at its own factory. There while recording these findings in paragraph no.2, the Division Bench has also noted that CBDT had accepted the correctness of the .....

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r direct supervision of own staff and under own quality control of assessee. - Decided in favour of assessee. - INCOME TAX REFERENCE No. 19 OF 1993. - Dated:- 9-4-2015 - B. P. Dharmadhikari And S.B. Shukre, JJ. For the Applicant : Mr.L.S. Dewani, Advocate. For the Respondent : Mr. Anand Parchure, Advocate. ORAL JUDGMENT. (Per B.P. Dharmadhikari, J) This Reference on an application under Section 256[1] of the Income Tax Act, 1961 at the instance of assess refers following two questions : 1. Wheth .....

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the assessee, answer to question no.1 may not be very relevant. 3. Shri Parchure, learned counsel for Revenue, however, submits that as both the questions are referred, both need to be appreciated and answered independently. According to him, effort of assessee to have answer to only question no.2 is erroneous. 4. Facts show that the assessee M/s. Vijay Udyog, is admittedly a partnership firm carrying on business in the manufacture of Pulses. It has engaged M/s. Vijay Dal Mills for crushing of .....

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n the ground that the assessee was not owner of a new industrial unit, and therefore, not entitled to claim deduction. It was found that the assessee had taken new unit on hire basis. Thereafter, the Commissioner passed order and enhanced the amount of income by ₹ 39,926/. Assessee questioned it before ITAT. ITAT considered both the questions raised by the assessee and held that the acceptance of two opinions on any dispute would deny the lower authorities access to Section 154, but, it ca .....

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07) 295 ITR 282 (SC) CIT .vrs. Max India Ltd. (2) ITA No.604/2011 dated 12.09.2014 (Bombay High Court) CIT .vrs. LIC Housing Finance Ltd. (3) (2010) 321 ITR 92 Grassim Industries Ltd. .vrs. CIT (4) (1993) 203 ITR 108 (Bom) CIT .vrs. Gabrial India Ltd. 6. In order to show that the provisions of Section 80I does not prohibit the assessee from taking machinery or plant on hire for the purpose of his manufacturing activity, he has relied upon the following three judgments. (1) (1979) 119 ITR 145 (Ca .....

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possible view is reached by the Assessing Officer, recourse to Section 263 of the Income Tax Act is not open, Shri Parchure, learned counsel appearing on behalf of revenue prefers not to dispute this. He however, attempted to demonstrate that in the present facts, such two opinions were never possible. He contends that bare looking at Section 80I, shows that it has been inserted in the statute book with a particular object. The incentive or inducement to new unit envisaged thereby would get def .....

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also been drawn to the agreement between the assessee and the other person owning Dal Mill namely - M/s. Vijay Dal Mills, Akola. At one stage, learned counsel also attempted to show that in agreement except for vague description of two artificial persons as parties, other details are not given. 10. In reply argument, Shri Dewani, learned counsel has pointed out that this Court is required to decide the questions placed before it by way of reference, and in admitted facts. He submits that effort .....

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ment upon it. He has only exerted himself to show that two views are not possible in present facts. 12. In view of this position, question no.2 placed for consideration before us needs to be answered in favour of the assessee and against the revenue. However, that by itself cannot and does not put an end to these proceedings. Question no.1 is also referred to us and hence, it needs to be answered. In order to decide whether two view on Section 80I are possible, in so far as present facts are con .....

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dertaking which fulfills conditions which are stipulated in subsections (i) to (iv), subsection [i] does not permit benefit of deduction to be taken if the industrial undertaking is formed by splitting up or reconstruction of a business, already in existence. Clause (ii) does not allow benefit to be taken if such undertaking is formed by transfer to a new business, machinery or plant previously used for any purpose. Clause (iii) again creates a bar if the industrial undertaking manufactures any .....

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d and it calls falls for interpretation which is in consonance with such words. The logic on lines behind enacting such a provision as urged by Shri Parchure does not figure anywhere therein. 14. Judgment in Calcutta High Court in case of Griffon laboratories (P) Ltd. .vrs. CIT. (supra), to which ITAT has made reference in the statement of case in paragraph nos. 11 and 12 considers the issue. It is observed that the manufacturer may hire a plant and machinery and employ, hired labour and manufac .....

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