9911796707
TMI Blog2019 (3) TMI 1547X X X X Extracts X X X X X X X X Extracts X X X X ..... hiruvananthapuram. The venture was started in a premise, having an extent of 4,000/- sq.ft. built up area, sublet by the assessee's sister concern, namely, M/s Stabilix Techonologies Pvt.Ltd. (for short 'STPL'). The assessee-company and STPL are both wholly owned subsidiary of M/s Stabilix Corporation, USA, which holds 99.99% share in each of them. STPL had leasehold right over a total extent of 6,000 sq.ft. built up area from M/s Electronics Technology Parks, Kerala and M/s Health Care Media Pvt.Ltd. and was itself a 100% EOU, producing computer software and supplying the same to the parent company. 2. The Assessing Officer (for short "A.O.") observed in Annexure A order pertaining to assessment year 2004-05 that the ratio of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the claim of the assessee for exemption under Section 10B(1) vide Annexure B order. 4. The Revenue was aggrieved and appealed before the Income Tax Appellate Tribunal, and to sustain the order of the C.I.T.(A), a cross-objection was filed by the assessee. The Tribunal, vide Annexure C order, held that the assessee has not satisfied the conditions of Section 10B(2)(iii) of the Act and was therefore, not entitled to be qualified for the benefit under Section 10B(2) of the Act and partly allowed the appeal. 5. The assessee impugn Annexure C order of the Tribunal before us. 6. The following questions of law, as re-framed by us, arise for consideration: i) Was the assessee's undertaking a new one and not formed merely by transfer of pl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee's case, relies on the decision Bajaj Tempo Ltd. v. CIT, [1992] 196 ITR 188 (SC). The C.I.T. (Appeals) relying on this decision, had found that the assessee's unit could not be said to have been formed by transfer of second-hand machineries. In the above-cited decision, considering the provision under Section 15C of the Income Tax Act, 1922, which is analogous to the provisions under Section 10B(1), it was held held that where the assessee had started a new industrial undertaking by taking on lease the building in which the promoter company had been carrying on its business, but the part played by the lease was not the dominant aspect in the formation of the new undertaking, the assessee was entitled to the relief under Sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sub-section (1), must be such that, but for the transfer, the new undertaking could not have come into being. In our opinion, on the facts found by the Tribunal, the part played by taking the building on lease was not dominant in the formation of the company." 11. The above-cited decision in Bajaj Tempo Ltd. (supra) according to us will not come to the rescue of the assessee in the instant case. Because, the assessee-company was formed using 66.66% of the site, apart from the computers, work stations and machinery, used by STPL, for the very same purpose. The only difference is that it is leased out, instead of an outright transfer. In our view, lease could also be considered as a 'transfer' for the purpose of Section 10B(2). The ..... X X X X Extracts X X X X X X X X Extracts X X X X
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