Law:

Section:

Section 80-IA of the Income-tax Act, 1961 - Deductions - Profits and gains from infrastructure undertakings - Assessee would be entitled to deduction under section 80-IA in respect of subsequent installation of plant and machinery together with and alongside existing plant and machinery in same unit, at same site and without any change in administrative or business set up [In favour of assessee] The Assessing Officer rejected assessee's claim for deduction under section 80-IA in respect of installation of certain plant and machinery on the ground that it amounted to setting up of a new industrial undertaking and assessee had not fulfilled required conditions for grant of deduction. The Commissioner (Appeals) upheld the order of the Assessing Officer. On appeal, the Tribunal allowed the deduction claimed by assessee observing that though the assessee installed new plant and machinery during the course of the assessment year, this was together with and along side the existing plant and machinery in the same unit, at the same site and without any change in the administrative or business set up. Held that, the assessee had not set up a separate or identifiable new unit during the course of the assessment year. In that view of the matter, the order passed by the Tribunal did not suffer from any error. JUDGMENT 1. This appeal by the Revenue under section 260A of the Income-tax Act, 1961, raises the following question of law : "Whether, on the facts and in the circumstances of the case and in law, the Income-tax Appellate Tribunal was justified in granting deduction in respect of the new unit at Silvassa disregarding the fact that the activities of the assessee do not amount to manufacturing and that the assessee is not entitled to any deduction under section 80-IA in respect of a new unit set up after March 31, 2000, in view of the provisions of the section 80-IA(2)(iv)(b) ?" 2. The assessee filed a return of income on October 29, 2004, declaring a total income of Rs. 4.89 crores after claiming a deduction under section 80-IA in respect of its Silvassa unit, at Rs. 50.85 lakhs and in respect of its Achhad unit at Rs. 74.55 lakhs. The Assessing Officer rejected the…

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