TMI Blog1980 (4) TMI 60X X X X Extracts X X X X X X X X Extracts X X X X ..... had a capacity to crash 800 metric tonnes of sugarcane per day. In the relevant accounting year, the assessee installed a second unit having a capacity of 450 metric tonnes per day. The assessee claimed relief under s. 80J of the I.T. Act, 1961. The ITO negatived the claim for relief on the ground that the plant and machinery cannot be considered as an independent unit, as it was admitted by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the second unit and even otherwise the Explanation to sub-s. (6) of s. 80J would come to the rescue of the assessee, since the value of the pans and crystallisers of the old unit was only Rs. 4 lakhs whereas the machinery installed in the second unit was worth about Rs. 45 lakhs. The Tribunal ultimately concluded that the second unit was not formed by the transfer of machinery or plant used in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court in the decision in Textile Machinery Corporation Ltd. v. CIT [1977] 107 ITR 195 has pointed out that the reconstruction of business involves the idea of substantially the same persons carrying on substantially the same business and there is an element of transfer of assets and continuity and a preservation of the old undertaking in an altered form and if the second unit set up by the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... equisite labour therein, and manufacture or production of articles in the second unit, and thus having its own separate and distinct identity, it cannot be considered as an undertaking formed by the splitting up or reconstruction of the existing unit and s. 80J(4)(i) is not, therefore, attracted. The further finding of the Tribunal is that the pans and crystallisers of the existing unit were use ..... X X X X Extracts X X X X X X X X Extracts X X X X
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