TMI Blog2018 (12) TMI 640X X X X Extracts X X X X X X X X Extracts X X X X ..... year 2009-2010 after the merger of two firms with effect from 26.12.2011. It is also undisputed that in view of the deletion of the provision of sub-section 9 of Section 10B was omitted from the statute with effect from 01.04.2004 and in view of the dictum in MKU (ARMOURS) PVT. LTD. [2015 (4) TMI 638 - ALLAHABAD HIGH COURT] and Renuga Textiles Mills Ltd.(2012 (7) TMI 589 - MADRAS HIGH COURT) the appellant has not made out any substantial questions of law as raised at para 5 of the appeal memorandum. The appeal upholding the deduction u/s 10B of the Act by the Income Tax Appellate Tribunal is just and proper. The revenue has not made out any ground to interfere with the impugned order passed by the Income Tax Appellate Tribunal exercising powers under Section 260A - ITA No 100029/2014 - - - Dated:- 10-10-2018 - MR B. VEERAPPA AND MR NARENDRA PRASAD, JJ. For The Appellants : Sri Y. V. Raviraj, Advocate For The Respondent : Sri H. R. Kambiyavar, Advocate JUDGMENT This appeal is filed by the Revenue against the order dated 07.02.2014 made in ITA No.1050/Bang/2012, for the assessment year 2009-2010 on the file of the Income Tax Appellate Tribunal, Bengalu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... learned counsel appearing for the parties to the lis. 5. Sri Raviraj, learned counsel appearing for the Revenue vehemently contended that the impugned order passed by the Tribunal allowing the claim of the assessee under Section 10B of the Act is without appreciating the fact that the assessee had not fulfilled the conditions as specified in Section 10-B (2) (iii) of the Act. He would further contend that the Tribunal ought to have appreciated that the provisions of Section 10B(2)(iii) of the Act, provided that the undertaking is not formed by the transfer to a new business of machinery or plant previously used for any purpose. However, Explanation 2 to Section 80I (2) of the Act, allows such transfer, where the total value of the machinery or plant or part so transferred does not exceed 20% of the total value of the machinery or plant used in the business. He would further contend that the Tribunal ought to have noticed the fact that as on the date of transfer of plant and machinery held by the assessee's unit amounted to ₹ 85,60,706/- whereas the total plant and machinery transferred by KMMI Exports amounted to ₹ 1,57,75,341/- and as such, the plant and machin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee, the Commissioner of Income Tax allowed the appeal on 30.05.2012 and recorded a finding that the Circular of the Board issued under Section 84 was not withdrawn and was still in force. It is the Rule and also the practice of the Board to withdraw the Circular once it is not relevant. Therefore, the Circular No.15/5/63-IT(A1) dated 13.12.1963 is in force and relevant in the present context, when the clauses under Section 80J and 10B are similar, as already stated earlier citing the authority of Hon'ble Apex Court. It was also recorded by the appellate authority that the observation made by the Assessing Officer, as per Section 10B(7) only Indian Company is eligible for amalgamation is not appropriate. As mentioned by the assessee in the written submissions that the sub sections (9) and (9A) which were omitted w.e.f. 01.04.2004 clearly suggests that the transfer by any means will not entitle the deduction under this Section only upto 31.03.2003. In other words, the transfer by any means is allowed w.e.f. 01.04.2004 by implication moreover the firms merged are family concerns with same partners, with the same sharing ratio and doing the same business and two firms are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 10B of the Act and the deduction is towards undertaking as long as undertakings are agreeable that Section 10B of the Act which is not been disputed by the assessing officer meager of the firm and M/s. KMMI Exports which is not undertaking in view of the above, the Tribunal upholding the order passed by the Appellate Court allowing the assessment deduction under Section 10B of the Act. Accordingly, grounds urged by the revenue in respect of point Nos. 2 and 3 are dismissed. 11. Insofar as the assesse's cross objection Sl.Nos. I to IV of the order of the Income Tax Appellate Tribunal states the disallowance made by the Assessing Officer and which are issues on the cross objection of the assessee and admittedly order passed by the Income Tax Appellate Tribunal in respect of cross objection has not been challenged in the present appeal. 12. It is also not in dispute that in view of the CBDT Circular dated 17.01.2013, wherein it clearly held that the vital factor in determining the issue would be facts such as how a slump sale is made and what is its nature. It will also be important to ensure that the slump sale would not result into any splitting or reconstruction of exis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cquisition , it is no doubt true as per the law laid down by the Apex Court that on merger, the amalgamating company looses its entity. But, then by such merger there is no formation of new business to disqualify the claim of the assessee for deduction under Section 10B of the Act. As already pointed out and rightly relied on by the assessee, the CBDT circular dated 13.12.1963, referred the benefit of Section 84 as available to successor for remaining years. In the said circular, the Board pointed out that the benefit under Section 84 is attached to the undertaking and not to the owner and the successor would be entitle to the benefit for the unexpired period of five years provided the undertaking is taken over as a running concern and continues its business as an EOU. 15. It is undisputed fact that the claim made by the assessee for deduction under Section 10B of the Act for the assessment year 2009-2010 after the merger of two firms with effect from 26.12.2011. It is also undisputed that in view of the deletion of the provision of sub-section 9 of Section 10B was omitted from the statute with effect from 01.04.2004 and in view of the dictums of the Division Bench of the Alla ..... X X X X Extracts X X X X X X X X Extracts X X X X
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