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[2008] 304 ITR 365 [2008] 172 TAXMAN 301 (GUJ.) HIGH COURT OF GUJARAT Commissioner of Income-tax* v. Lakhanpal National Ltd. D.A. MEHTA AND Z.K. SAIYED, JJ. IT REFERENCE NO. 31 OF 1997 FEBRUARY 26, 2008 Section 80-I of the Income-tax Act, 1961 - Deductions - Profits and gains from industrial undertakings, etc., after certain dates - Assessment years 1982-83 and 1983-84 - During relevant assessment years, assessee-company had undertaken manufacturing of dry cell batteries and claimed deduction under section 80-I which was denied by Assessing Officer on ground that assessee had installed only two new assembly lines as against five and new assembly lines were very much dependent on earlier existing facilities, like zinc and electrolytes section and other utilities, viz., air, water, gas and electricity generator, etc., and they were not capable of functioning on their own without seeking assistance from old facilities - Whether when it was not case of revenue that industrial undertaking had been brought into existence by reconstruction or by splitting up old business and further, value of existing facilities used by two new sections was negligible as compared to value of additional machinery for new unit, assessee-company could be denied benefit of section 80-I - Held, no FACTS During the relevant assessment years, the assessee-company had undertaken manufacturing of two types of dry cell batteries and for that purpose, it had installed new assembly lines. It claimed deduction under section 80-I, which was disallowed by the Assessing Officer on the ground that the assessee had installed only two assembly lines as against five; and that new assembly lines were very much dependent on the earlier existing facilities, like, zinc and electrolytes section and other utilities, viz., air, water, gas and electricity generator, etc., and they were not capable of functioning on their own without seeking assistance from the old facilities. On appeal, the Commissioner (Appeals) allowed the claim of the assessee. The Tribunal upheld the order of the Commissioner (Appeals) observing that it could not be said that the new industrial undertaking had been brought into existence by…

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