TMI Blog1979 (1) TMI 76X X X X Extracts X X X X X X X X Extracts X X X X ..... round that the starting of the new kilns did not amount to creation of a new industrial undertaking as contemplated by s. 15C of the Indian I.T. Act, 1922, and he took the view that these were improvements of or extensions to the existing factories and since part of the old buildings, machinery and plant were utilised in the working of the new kilns, the assessee was not entitled to relief under s. 15C in respect of the profits arising as a result of the introduction of these kilns. The appeal filed by the assessee was, however, allowed by the AAC and the department then went in appeal against the order of the AAC to the Income-tax Appellate Tribunal. Before the Tribunal, the assessee had referred to a, certificate by the companies engine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the fact that some old staff did the routine work for the new unit as for the old and that some godowns and office buildings of the old unit were available for use for the products of the new unit. The Tribunal thus found that it had to be ascertained whether the capacity generated by the new installation was such that it could have sustained as an independent viable unit by itself if it was started afresh. On the basis of the figures before the Tribunal, as shown in Ex. 'A', the Tribunal found that the increased capacity of the factories as a consequence of the new kilns varied from 33% to 183% and such increase in the production capacity of the undertakings, according to the Tribunal, must be considered large enough to be called new u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y of the old kilns and if on account of lack of demand, production has to be curtailed, any of the kilns, whether old or newly erected, could be stopped. The certificate also specifies the main auxiliary machinery installed together with the kiln such as crusher, raw mill, coal mill, cement mill, compressors, transformers and quarry machinery. The statement attached to the certificate also discloses the additional capacity of the new kilns as compared with the existing works. In respect of the kilns at Bhupendra, Kistna, Chaibasa and Shahabad, the capacity of the new kilns is stated to be 1,00,000 tons, 1,65,000 tons, 1,00,000 tons and 1,00,000 tons, respectively. It is important to point out that in respect of the newly erected kiln at Kis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ut the aid of power have been employed, such an integrated unit will qualify for the relief under s. 15C of the Indian I.T. Act, 1922. The Supreme Court has pointed out in that case that such a new industrially recognisable unit of an assessee cannot be said to be reconstruction of his old business, since there is no transfer of any assets of the old business to the new undertaking which takes place when there is reconstruction of the old business. It was held in that case that for the purpose of s. 15C, the industrial unit set up must be new in the sense that new plants and machinery must be erected for producing either the same commodities or some distinct commodities. The facts which we have referred to earlier clearly establish that the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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