HIGH COURT OF KARNATAKA
Commissioner of Income-tax, Central Circle, Bangalore
Versus
Bhuwalka Steel Industries Ltd.
IT APPEAL NO. 922 OF 2006
DECEMBER 3, 2012
JUDGMENT
1. Appeal by the revenue under Section 260A of the Income Tax Act, 1961 [for short, the Act], raising the following substantial question of law:
Whether the Appellate Authorities were correct in holding that the assessee would be entitled to claim deduction over the industrial undertaking taken over from M/s. A.A. Alloys Ltd., despite the prohibition contained in sub-section (2) of Section 801 which would amount to reconstruction of already existing business or plant previously used for any purpose.
as question arising from the order dated 16-12-2005 passed by the income tax appellate tribunal, Bangalore Bench, Bangalore in ITA No 122/Bang/2003 relating to assessment year 1995-96 of the respondent-assessee company.
2. Appeal has been admitted for examination.
3. Brief facts leading to the above appeal are that: The assessee is a limited company and for the assessment year in question viz., 1995-96 i.e. accounting period from 1-4-1994 to 31-3-1995, to be precise, on 1-4-1994, an industrial undertaking which was being run in the name and style of M/s AA Alloys Ltd., a limited company, got amalgamated with the assessee company in terms of a scheme of amalgamation propounded between the assessee company and the other company before this court and which was approved by this court as per order dated 8-8-1995. There is no dispute about this factum. In its return for the accounting period relating to assessment year 1995-96, the assessee company claimed the benefit of the provisions of Section 80-I of the Act in respect of a sum of Rs. 21,90,823/- on the premise that this was the profit earned by the industrial undertaking which was hitherto being run by the amalgamating company namely M/s AA Alloys Ltd., which activity has been carried on by the assessee company on and after 1-4-1994 etc.
4. The assessing officer was of the opinion that the claim of the assessee company as had been admitted earlier was not correct and therefore reopened the assessment for the year concerned by issue of notice under Section 148 of the Act. The assessing officer was of the view that the assessee company was not eligible for the deduction under Section 80-I in view of the restriction imposed under clause (ii) of sub-section (2) of Section 80-I of the Act. Sub-section (2) of Section 80-I of the Act reads as under:
80-I. Deduction in respect of profits and gains from industrial undertakings after a certain date, etc.
