TMI Blog2015 (4) TMI 630X X X X Extracts X X X X X X X X Extracts X X X X ..... dertaking. If the gross total income of assessee includes such profits, deduction therefrom of an amount equal to 20% thereof is permitted. The proviso in subsection [2] stipulate that Section 80I applies to any industrial undertaking 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 article or thing, which i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... being done through machinery belonging to other company on hire, under 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. Whether on the facts and in the circumstances of the case, the Assessee is entitled to a deduction under Section 80I of the Income Tax Act, 1961 ? ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 cannot stop the CIT from invoking the provisions of Section 263 of the Income Tax Act. It is in this background, that the above mentioned two questions have been referred. 5. Shri Dewani, learned counsel has relied upon four judgments to submit that when two views on any dispute exists, adoption of one view by the assessing officer cannot be faulted with under Section 263 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng 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 defeated if such arrangement is accepted. In order to show this intention of legislature, he has relied upon Section 80I( 2)(i) to (iv). He submits that composite reading of all these provisions show that the unit with the manufacturer must be a new unit, and therefore, of his own. He submits that otherwise the conditions imposed by Section 80I( 2) will be frustrated. He also draws support from the observations contained in the order of CIT under Section 263 and in orders of ITAT. 9. Attention has also been drawn to the agreement between the assessee and the other person owni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section is on the subject of deduction in respect of profit and gains derived from an industrial undertaking, after certain date etc. It's subsection [1] is about profits derived from an industrial undertaking. If the gross total income of assessee includes such profits, deduction therefrom of an amount equal to 20% thereof is permitted. The proviso in subsection [2] stipulate that Section 80I applies to any industrial undertaking 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 under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed case of a Tea Manufacturers who was getting tea processed for it by its sister concern and found it entitled to deduction under Section 80I. Division Bench of this Court in a case reported at (1992) 196 ITR 813 (Bom) (CIT .vrs. Penwalt India Ltd.), has considered a finding by the Tribunal of absence of factory for manufacturing facility of its own, where assessee company utilizes facilities of others on payment, and found assessee entitled to relief as contemplated under Section 80I of the Income Tax Act, upholding those findings. Other judgment of this Court reported at (1991) 191 ITR 92 (bom) (Cit .vrs. Anglo French Drug Co. (Eastern) Ltd), again shows a finding that the manufacturing company need not manufacture the goods by its own p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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