9911796707
TMI Blog2021 (8) TMI 1050X X X X Extracts X X X X X X X X Extracts X X X X ..... of the order dated 31.12.2007, made in I.T.A.Nos.1076, 1077, 1078, 1079, 1080 & 1081/Mds/2006 passed by the Income Tax Appellate Tribunal 'C' Bench, Chennai (for brevity "the Tribunal") for the assessment years 1997-98 to 2002-03 respectively, which were admitted on 27.08.2008, on the following substantial question of law:- "Whether the Tribunal was justified in denying relief u/s 80-IA of the Act, when the appellant has satisfied all the conditions mentioned therein?" 2.There are two other appeals viz., T.C.A.Nos.357 and 358 of 2009, which were also filed by the assessee challenging the order dated 05.11.2008 made in I.T.A.No.201/Mds/2008 on the file of the Income Tax Appellate Tribunal 'C' Bench, Chennai for the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 80-IA of the Act. Aggrieved by such order, the assessee preferred appeal before the Commissioner of Income Tax (Appeals)-V, Chennai (for brevity "the CIT(A)"). The CIT(A), by order dated 30.01.2006, allowed the appeals filed by the assessee. Aggrieved by the same, the Revenue preferred appeals before the Tribunal, which were allowed and this is how the assessee is before us by way of the present tax case appeals. 6.The short question, which falls for consideration in this batch of cases is whether the assessee fulfils the conditions stipulated under Section 80-IA(3) of the Act. The said provision reads as follows:- "Section 80-IA(3):- This section applies to an undertaking referred to in clause (iv) of sub-section (4) which fulfils ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ciation in respect of such machinery or plant has been allowed or is allowable under the provisions of this Act in computing the total income of any person for any period prior to the date of the installation of machinery or plant by the assessee. Explanation 2 - Where in the case of an undertaking, any machinery or plant or any part thereof previously used for any purpose is transferred to a new business and the total value of the machinery or plant or part so transferred does not exceed twenty per cent of the total value of the machinery or plant used in the business, then, for the purposes of clause (ii) of this sub-section, the condition specified therein shall be deemed to have been complied with." 7.Thus, the two conditions, which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ss to disentitle the undertaking should have been of the assessee himself. In our opinion this aspect of the Bombay decision was correctly decided and the tribunal was not justified in deciding in favour of assessee on this ground. We therefore endorse the view of Bombay High Court and Punjab and Haryana High Court in Phagoo Mal Sant Ram v. Commissioner of Income Tax, Patiala, 74 ITR [1969] 734 of this extent that, `previously used in any other business' cannot be construed so narrowly as to confine it to building of the assessee only. But we do not approve of the Bombay view that if a new undertaking is established in a premises taken on lease then it, always, amounts to formation of the undertaking by transfer of the building previous ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to how the words "previously used" have to be interpreted in the case on hand. 10.The argument of Mr.J.Narayanaswamy, learned Senior Standing Counsel is that the Tribunal is right in concluding that the lessor having claimed 100% depreciation on the said asset, the asset is an used asset for the purpose of generation of electricity and the assessee's claim is clearly barred. 11.On a plain reading of the above statutory provision would clearly show that the words "previously used" would mean actual physical use of the asset and not deemed to have been previously used. The benefit claimed by the assessee in the case on hand is a deduction under Section 80-IA, which is a deduction, which was brought to encourage industrial growth. There ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taken on lease then it, always, amounts to formation of the undertaking by transfer of the building previously used. The Hon'ble Supreme Court came to such conclusion by observing that the said decision was given without examining the scope of the word "formed", which was construed by the Hon'ble Supreme Court in Textile Machinery Corporation Ltd. vs. CIT reported in (1997) 186 ITR 195, which approved the decision of the High Court of Delhi in CIT vs. Ganga Sugar Corporation Ltd. reported in (1973) 92 ITR 173 (Del). Further, it was held that building, machinery or plant used previously in other business should not result in the undertaking being formed by it. The transfer to take out the new undertaking out of the purview of sub-sec ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
