Allahabad HC upholds ITAT
order for AY 2001-02, denies Sec. 80-IB deduction to assessee-company’s
(running a flour mill) on profits of industrial unit formed by takeover of
entire business from another entity; Holds that the industrial unit was set up
by purchase of used plant and machinery thus, resulting in violation of
condition u/s 80IB(2)(ii), observes that the purpose of Sec. 80-IB is to
promote setting up of a new industrial undertaking by purchasing new plant and
machinery which stands defeated in assessee's case; Relies on Madras HC
ruling in Heartland KG Information Limited rendered in context of Sec. 10A(2),
observes that Sec. 80IB(2)(ii) is pari materia with Sec.
10A(2)(iii); Clarifies that transfer of used plant and machinery to a new
undertaking and the formation of an industrial undertaking by splitting up/
reconstruction of existing business are two separate conditions u/s 80IB(2),
distinguishes assessee's reliance on Bombay HC ruling in Sonata Software
Limited in the context of splitting up/reconstruction; Remarks
that “The transfer of the used plant and machinery may not result in
splitting and reconstruction of the existing industrial undertaking but
nevertheless when an unit as a whole is transferred, it includes the transfer
of plant and machinery which was in use by the existing unit of a separate
legal entity for the formation of a separate industrial undertaking. This kind
of transfer is clearly hit by clause (iii) of Sec. 10A(2)..”:HC
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