TMI Blog2022 (3) TMI 1360X X X X Extracts X X X X X X X X Extracts X X X X ..... siness of the company had grown and with a view to expand its business, the company started a new Unit by making investment as shown in the Chart reproduced abve. New employees were recruited by the Assessee for Unit-III. Separate account books were maintained by Assessee qua Unit-II Unit-III. Tribunal rightly came to the conclusion that the assessee was entitled to claim benefit under Section 80-IC of the Act by treating Unit-III of the assessee-company as a separate and distinct Unit - findings recorded by the Tribunal can neither be said to be perverse or result of misreading of evidence and material on record. The substantial question of law decided in favour of assessee. - Income Tax Appeal No.8 of 2021 Alongwith Income Tax Appeal Nos.10 And 11 of 2021 - - - Dated:- 28-3-2022 - Hon ble Ms. Justice Sabina And Hon ble Mr. Justice Satyen Vaidya For the Appellant : Mr. Vinay Kuthiala, Sr. Advocate With Ms. Vandana Kuthiala, Advocate For the Respondent : Mr. vishal Mohan, Advocate with Mr. Aditya Sood, Mr. Praveen Sharma And Ms. Sumandini Sharma, Advocates JUDGEMENT Vide this order, above mentioned three appeals, would be disposed of, as they ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , run by the assessee, was not an independent Unit. In fact, appellant was not entitled to claim benefit under Section 80-IC of the Act. Unit-III was being operated from the registered office of the assessee and no rent was being paid by the assessee. 8. Mr. Vishal Mohan, learned Counsel for the assessee, on the other hand, has opposed the appeals and has submitted that it has been duly noticed by the Tribunal that Unit-II and Unit- III were run by the assessee-company from different buildings. Separate staff had been employed by the assessee for running both the Units. Investment qua both the units had been separately made by the assessee and separate Account Books (which were duly audited), were being maintained by the assessee. There was no inter-lapping between Unit-II and Unit-III. 9. In support of his arguments, the learned counsel for the assessee-company, has placed reliance on a decision rendered by the Hon ble Supreme Court in case titled Bajaj Tempo Ltd. versus Commissioner of Income Tax , reported in (1992) 3 SCC 78, wherein, it was held as under:- 9.Initial exercise, therefore, should be to find out if the undertaking was new. Once this test ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erved (SCC p.375, para 18): The true test, is not whether the new industrial undertaking connotes expansion of the existing business of the assessee but whether it is all the same a new and identifiable undertaking separate and distinct from the existing business. No particular decision in one case can lay down an inexorable test to determine whether a given case comes under Section 15-C or not. In order that the new undertaking can be said to be not formed out of the already existing business, there must be a new emergence of a physically separate industrial unit which may exist on its own as a viable unit. An undertaking is formed out of the existing business if the physical identity with the old unit is preserved. Even though this decision was concerned with the clause dealing with reconstruction of existing business but the expression `not formed' was construed to mean that the undertaking should not be a continuation of the old but emergence of a new unit. Therefore even if the undertaking is established by transfer of building, plant or machinery but it is not formed as a result of such transfer the assessee could not be denied the benefit. 10. Lear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sense that the commodities produced or the results achieved are commercially tangible products and the undertakings can be carried on separately without complete absorption and losing their identity in the old business, they are not to be treated as being formed by reconstruction of the old business. 11. Before the Tribunal, it had been demonstrated by the assessee that Unit-II Unit-III were being operated from separate buildings with separate employees, separate clientage, separate sale-tax registration numbers and separate registration with District Industries Center. The said Chart, as reproduced in the order passed by the Tribunal, is as under:- .. Particulars Unit-II Unit-III Name and address of the Unit Altruist Technologies Pvt. Ltd., Unit-II, Block 24, SDA Commercial Complex, STPI Building Kasumpti, Shimla. Altruist Technologies Pvt. Ltd. Unit-III, 4 th Floor, Altruist Mount, Behind Firhill, Shimla. Distance between the two units 7 Kms. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4 MTNL-Mumbai 258361 Shortformats Digital Productions Pvt. Ltd. 1469686 AMA India Consultants Income 610786 Federation of All India Aluminum Utensils Manufac 18000 The Tribune Trust 200000 Total 17,169,557 .. 12. It was the case of the assessee before the Tribunal that earlier the Company was giving services in relation of one product, i.e. voice chat to its clients, like Airtell, Reliance, Idea Tata. Since the business of the company had grown, it found it necessary to start a new Unit with a view to expand its area of service and consequently, a separate Unit was started, giving services to other Non-Telco Companies/Clients in the field of Information, Technology and Software Services. The office building, where Unit-III had been started, was earlier registered office of the company, whereas, Unit-II was being run from another building which was situated at a distanc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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