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TMI Blog2016 (3) TMI 686X X X X Extracts X X X X X X X X Extracts X X X X ..... rs passed for three several assessment years, viz. the assessment years 1995-96, 1996-97 and 1997-98. All the three appeals were disposed of by the learned Tribunal by a common judgment. The admitted facts and circumstances of the case are as follows:- On 27th September, 1988, the assessee purchased a water treatment chemical plant at Rishra from Indian Explosive Limited at a sum of Rs. 54.55 lakhs. The assessee also purchased new machinery worth Rs. 18.69 lakhs and commenced the water treatment plant at Rishra and continued operation thereof during the accounting year 1988-89 corresponding to assessment year 1989-90. In the next financial year, that is to say, in the year 1989-90 corresponding to assessment year 1990-91, the assessee inst ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er to answer the question, we have to notice sub-section (1) of section 80I which reads as follows:- "(1) Where the gross total income of an assessee includes any profits and gains derived from an industrial undertaking or a ship or the business of a hotel [or the business of repairs to ocean-going vessels or other powered craft], to which this section applies, there shall, in accordance with and subject to the provisions of this section, be allowed, in computing the total income of the assessee, a deduction from such profits and gains of an amount equal to 20% thereof: Provided that in the case of an assessee, being a company, the provisions of this sub-section shall have effect [in relation to profits and gains derived from an industri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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: Provided further that the condition in clause (iii) shall, in relation to a small-scale industrial undertaking, apply as if the words "not being any article or thing specified in the list in the Eleventh Schedule" had been omitted. Explanation 1. - for the purposes of clause (ii) of this sub-section, any machinery or plant which was used outside India by any person other than the assessee shall not be regarded as machinery or plant previously used for any purpose, if the following conditions are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roximately used at Rishra were installed in the new plant at Konnanagar. But the rigour of the aforesaid clause has been relaxed by the Explanation-II quoted above which provides that total value of the machinery or the plant so transferred should not exceed 20% of the total value of the machinery or the plant. Admittedly, in this case, the total value of the plant installed at Konnagar was more than Rs. 6 crores and therefore the total value of the machinery or the plant which was transferred from Rishra to Konnagar being Rs. 73 lakhs was less than 20%. It has not been contended that any other clause or any other provision of sub-section (2) of section 80I has not been complied with by the assessee. Mr. Agarwal, learned counsel appearing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iness of a hotel which starts functioning, on or after the 1st day of April, 1990 but before the 1st day of April, 1991, provisions of the sub-section shall have effect as if for the words "seven assessment years", the words "nine assessment years" had been substituted: Provided also that in the case of an assessee, being a co-operative society, deriving profits, and gains from an industrial undertaking or a ship or a hotel referred to in the third proviso, the provisions of that proviso shall have effect as if for the words "nine assessment years", the words "eleven assessment years" had been substituted." Mr. Agarwal contended that from a plain reading of sub-section (5)(i) it would appear that unless the assessee qualified for the be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e meaning or interpretation given by Mr. Agarwal is to be accepted, that would mean that an industrial undertaking cannot seek to derive the advantage of section 80I by fulfilling the conditions set out in sub-section (2) of section 80I; whereas the object according to us is that the benefit shall be given to an industrial undertaking which fulfills the conditions set out in subsection (2). The assessee in this case does fulfill that condition and there is no dispute with regard thereto. Reference can be made to the judgment in the case of Bajaj Tempo Ltd. Vs. Commissioner of Income Tax, reported in (1992) 196 ITR 188, wherein question arose whether in view of transfer of tools and implements worth Rs. 3500/- the assessee fell within the m ..... X X X X Extracts X X X X X X X X Extracts X X X X
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