TMI Blog1979 (4) TMI 25X X X X Extracts X X X X X X X X Extracts X X X X ..... er, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the industrial undertaking running the new re-rolling mill was not formed by the reconstruction of the business already in existence? " The facts giving rise to these reference applications are these : The assessee, i.e., M/s. Batala Engineering Co. Ltd., Ballabgarh, is a limited company and in addition to manufacturing machine tools, it has re-rolling mill also. The accounting year followed was the financial year. The assessee is in re-rolling business since 1933. The mill which was about 30 years old had outlived its utility and that mill was, therefore, scrapped in June, 1962. The assessee installed a new mill which started functioning ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eved by this order, filed appeals and the AAC accepted the assessee's claim for exemption under s. 84 of the Act for the assessment year 1963-64. He found that the new rolling mill was an industrial undertaking within the meaning of s. 84 of the Act and it was not a case of reconstruction or continuing in operation of the old undertaking. The revenue, being aggrieved by this order of the A AC, filed an appeal before the Income-tax Appellate Tribunal, Chandigarh, and pleaded that s. 84 being an exemption clause, must be construed strictly and in support thereof placed reliance on the judgments in Crown Flour Mills v. CIT [1956] 29 ITR 733 (Punj), CIT v. Ramakrishna Deo [1959] 35 ITR 312 (SC), Parimisetti Seetharamamma v. CIT [1965] 57 ITR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 84. The old building from which the machinery was taken out is used for storage. On the facts of this case, we do not have the slightest hesitation in coming to the conclusion that the new rolling mill set up by the assessee is not formed by the reconstruction of a business already in existence. " The learned counsel for the revenue vehemently argued that though the Supreme Court in Textile Machinery Corporation Ltd. v. CIT [1977] 107 ITR 195 did reverse the judgment of the Calcutta High Court in CIT v. Textile Machinery Corporation [1971] 80 ITR 428, yet the observations made therein, at page 448, are quite relevant and have not been held to be wrong. We do not find any force in this contention. Their Lordships of the Supreme Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5C (corresponding to s. 84 of the Act), the following facts have to be established by the assessee, subject always to time-schedule in the section : " (1) investment of substantial fresh capital in the industrial undertaking set up, (2) employment of requisite labour therein, (3) manufacture or production of articles in the said undertaking, (4) earning of profits clearly attributable to the said new undertaking, and (5) above all, a separate and distinct identity of the industrial unit set up. " Applying these tests to the facts of the present case, we are of the opinion that the AAC, as well as the Tribunal, have come to a right conclusion in granting the assessee the benefit of s. 84 of the Act. The legislature has a ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
