Textile Machinery Corporation Ltd. v. CIT

107 ITR 195Supreme Court of India1977#591 most cited

What is Textile Machinery Corporation Ltd. v. CIT authority for?

A new industrial undertaking is not considered a reconstruction of an existing business for tax deduction purposes if it is a separate, independent production unit manufacturing commercially tangible products that can operate without losing its identity in the old business. The transfer and substantial use of assets and manpower from an old business to a new one may indicate reconstruction.

165

judgments rely on this decision, according to BharatTax’s citation analysis of 366,470 Indian tax judgments — from 2008 to 2026.

Also referred to as

Textile Machinery Corporation Ltd. v. CIT · 107 ITR 195 · Section 80J · Section 80IC · new industrial undertaking · reconstruction of business · splitting up of business · tax deduction eligibility · independent production unit · transfer of substantial assets · tax benefits

Also reported as

2 SCC 368

Sections most often in play

Section 143(3)Section 263Section 80-ICSection 10(2A)Section 143(3A)Section 28(v)Section 40(b)Section 143(3B)

Issues it is cited on

section 2(29ba)software technology parksection 80jsection 80icsection 80hhcsection 80hhtax benefitsection 80isection 80iasection 10aarm's length pricegross total income

Judgments citing Textile Machinery Corporation Ltd. v. CIT

Medley Pharmaceuticals Ltd., Mumbai vs. Dy.C.I.T., Cent.Cir.44, Mumbai

In the result, for assessment year 1999-2000 appeal of the assessee is allowed to the above extent

ITA 1384/MUM/2009[1999-2000]Status: DisposedITAT Mumbai29 Jun 2016AY 1999-2000

Bench: Shri G.S.Pannu & Shri Amit Shukla

For Appellant: Shri Prakash JotwaniFor Respondent: Shri N.P. Singh
Section 132Section 132(1)Section 143(3)Section 153ASection 801ASection 80I

…different item from what was being manufactured by the old unit in order to claim exemption under section 80IA and 80IB of the Act. Reference can be made to the judgments of the Hon’ble Supreme Court in the case of Textile Machinery Corporation Ltd. vs. CIT, 107 ITR 195 (SC) as also in the case of Indian Aluminium Co. Ltd., 108 ITR 367(SC) in this context. The aforesaid decisions would reveal the facts that show that new units were set-up for the purpose of producing the same item which were being produced in the old units. Both the judgments show that the decisive test is that industrial unit set-up must be new…

DCIT, Circle-1, Kolkata vs. M/S Axsys Technologies Ltd, Kolkata

In the result, Revenue’s appeal stands dismissed

ITA 1639/KOL/2012[2009-10]Status: DisposedITAT Kolkata11 May 2016AY 2009-10

Bench: Shri Waseem Ahmed & Shri S.S.Viswanethra Raviassessment Year :2009-10

Section 10ASection 10A(2)Section 143(3)Section 36

…common, it does not mean that the new project is set up by reconstruction or splitting up of the existing business—Deduction under ss. 80HH and 80J admissible in respect of the new project—Textile Machinery Corporation Ltd. vs. CIT 1977 CTR (SC) 151 : (1977) 107 ITR 195 (SC) applied. In the case of Quality Steel Tube Ltd. (supra), it was held that even if substantial persons have started the unit then it cannot be considered as reconstruction of the company. There is substantial investment in the Plant & Machinery in the company. We also find from the records that VCIL was still functioning and in support of it…

ACIT 8(1), Mumbai vs. Celetronix India P. Ltd, Mumbai

In the result the appeal of the revenue is dismissed and the cross-objection filed by the assessee is allowed

ITA 5433/MUM/2009[2003-04]Status: DisposedITAT Mumbai29 Apr 2016AY 2003-04

Bench: Shri Amit Shukla, Jm & Shri Rajesh Kumar, Am आमकय अऩीर सं./I.T.A. No.5433/Mum/2009 (ननधधारण वषा / Assessment Year : 2003-04) बनधम/ Celetronix India Pvt Ltd, Asstt. Commissioner Of Income C/O Jabil Circuit (I) Pvt.Ltd., Tax -8(1), Vs. Arena House, 3Rd Floor, Plot No.103, Room No.210, 2Nd Floor, Road No.12, Opp Tunga Paradise, Aayaker Bhavan, Marol, Midc, Andheri (E), M K Road, Mumbai-400093 Mumbai-400020 स्थधयी ऱेखध सं./ Pan : Aaact7548K (अऩीराथी /Appellant) (प्रत्मथी / Respondent) .. Cross-Objection No.81/Mum/2010 Arising Out Of I.T.A. No.5433/Mum/2009 (ननधधारण वषा / Assessment Year : 2003-04) Celetronix India Pvt Ltd, बनधम/ Asstt.Commissioner Of Income Tax 8(1), Vs. Mumbai-400020 (अऩीराथी /Appellant) (प्रत्मथी / Respondent) ..

For Appellant: Ms.Radha K NarangFor Respondent: S/Shri Sanjiv Shah, Shailesh
Section 10ASection 10A(9)Section 143(2)Section 143(3)

…T (257 ITR 338)(SC), K P Varghese Vis ITO (131 ITR 597) (SC), Allied Motors (P) Ltd Vis CIT (224 ITR 677)(SC), CIT V/s Podar Cement Pvt.Ltd and others (226 ITR 625)(SC), CIT V/s Alom Extrusions Ltd (319 ITR 306) (SC), Textile Machiner Corporation Ltd Vis CIT (107 ITR 195 (SC), CIT V/s Indian Aluminum Co.Ltd. (108 ITR 367) (SC) and ITO V/s DCM Soft (P) Ltd (115 TTJ 469) (Chennai Tribunal). 7. We have considered the rival submissions and perused the relevant material placed before us and also various case laws referred to by both the parties. In the case of assessee the undisputed facts are that the assessee issued…

Principal Commissioner of Income Tax-5 vs. M/s. VBC Industries Limited

ITTA/559/2015HC Telangana16 Feb 2016

Bench: RAMESH RANGANATHAN,M.SATYANARAYANA MURTHY

Shri Hari Krishna Papers Private Limited, Udamalpet vs. ACIT, Coimbatore

In the result, the appeal of the assessee in ITA

ITA 633/CHNY/2014[2009-2010]Status: DisposedITAT Chennai24 Jul 2015AY 2009-2010

Bench: Shri Chandra Poojari & Shri Challa Nagendra Prasadआयकर अपील सं./ I.T.A. No. 633/Mds/2014 ("नधा"रण वष" / Assessment Year : 2009-2010 )

For Appellant: Shri. A. Arjunaraj and Shri. AFor Respondent: Shri. N. Madhavan, IRS, JCIT
Section 80ISection 80l

…of India, Commercial Branch, Trichy Road, Coimbatore. The lower authorities are not correct in holding that the power plant was not a distinct unit. The true principle as laid down by the Apex Court, in the case of Textile Machinery Corporation Ltd., Vs. CIT 107 ITR 195, directly and squarely applies to the facts of the case. In the instant case, the true test is not whether the new industrial undertaking connotes expansion of the existing business of the assessee but whether it is all the same a new an identifiable undertaking separate and distinct from the existing business of the assessee but whether it i…

Commissioner of Income Tax-V vs. Quadrant Infotech India (P) Ltd

ITA/318/2013HC Delhi26 Jul 2013

Bench: HON'BLE MR. JUSTICE SANJIV KHANNA,HON'BLE MR. JUSTICE SANJEEV SACHDEVA

Section 15C

…a new unit and not a mere reconstruction or splitting up of the business in existence. The aforesaid finding is in accord with the decision of the Supreme Court in Textile Machinery Corporation Limited versus Commissioner of Income Tax, West Bengal, (1977) 107 ITR 195 wherein the Supreme Court upheld the contention of the assessee therein that a new industrial undertaking had been established as it was housed in a separate building, industrial licence had been obtained and new and independent plant and machinery had been installed. It was observed as under " No hard and fast rule can be laid down. Trade and in…

Commissioner of Income Tax-V vs. Quadrant Infotech India (P) Ltd

ITA/319/2013HC Delhi26 Jul 2013

Bench: HON'BLE MR. JUSTICE SANJIV KHANNA,HON'BLE MR. JUSTICE SANJEEV SACHDEVA

Section 15C

…a new unit and not a mere reconstruction or splitting up of the business in existence. The aforesaid finding is in accord with the decision of the Supreme Court in Textile Machinery Corporation Limited versus Commissioner of Income Tax, West Bengal, (1977) 107 ITR 195 wherein the Supreme Court upheld the contention of the assessee therein that a new industrial undertaking had been established as it was housed in a separate building, industrial licence had been obtained and new and independent plant and machinery had been installed. It was observed as under " No hard and fast rule can be laid down. Trade and in…

Commissioner of Income Tax-V vs. Quadrant Infotech India (P) Ltd

ITA/315/2013HC Delhi26 Jul 2013

Bench: HON'BLE MR. JUSTICE SANJIV KHANNA,HON'BLE MR. JUSTICE SANJEEV SACHDEVA

Section 15C

…a new unit and not a mere reconstruction or splitting up of the business in existence. The aforesaid finding is in accord with the decision of the Supreme Court in Textile Machinery Corporation Limited versus Commissioner of Income Tax, West Bengal, (1977) 107 ITR 195 wherein the Supreme Court upheld the contention of the assessee therein that a new industrial undertaking had been established as it was housed in a separate building, industrial licence had been obtained and new and independent plant and machinery had been installed. It was observed as under " No hard and fast rule can be laid down. Trade and in…

Commissioner of Income Tax-V vs. Quadrant Infotech India (P) Ltd

ITA - 318 / 2013HC Delhi26 Jul 2013
Section 15C

…ot a mere reconstruction or splitting up of the business in existence. The aforesaid finding is in accord with the decision of the Supreme Court 2013:DHC:7856-DB in Textile Machinery Corporation Limited versus Commissioner of Income Tax, West Bengal, (1977) 107 ITR 195 wherein the Supreme Court upheld the contention of the assessee therein that a new industrial undertaking had been established as it was housed in a separate building, industrial licence had been obtained and new and independent plant and machinery had been installed. It was observed as under " No hard and fast rule can be laid down. Trade and in…

Commissioner of Income Tax-V vs. Quadrant Infotech India (P) Ltd

ITA - 316 / 2013HC Delhi26 Jul 2013
Section 15C

…ot a mere reconstruction or splitting up of the business in existence. The aforesaid finding is in accord with the decision of the Supreme Court 2013:DHC:7856-DB in Textile Machinery Corporation Limited versus Commissioner of Income Tax, West Bengal, (1977) 107 ITR 195 wherein the Supreme Court upheld the contention of the assessee therein that a new industrial undertaking had been established as it was housed in a separate building, industrial licence had been obtained and new and independent plant and machinery had been installed. It was observed as under " No hard and fast rule can be laid down. Trade and in…

Commissioner of Income Tax-V vs. Quadrant Infotech India (P) Ltd

ITA - 315 / 2013HC Delhi26 Jul 2013
Section 15C

…ot a mere reconstruction or splitting up of the business in existence. The aforesaid finding is in accord with the decision of the Supreme Court 2013:DHC:7856-DB in Textile Machinery Corporation Limited versus Commissioner of Income Tax, West Bengal, (1977) 107 ITR 195 wherein the Supreme Court upheld the contention of the assessee therein that a new industrial undertaking had been established as it was housed in a separate building, industrial licence had been obtained and new and independent plant and machinery had been installed. It was observed as under " No hard and fast rule can be laid down. Trade and in…

Commissioner of Income Tax-V vs. Quadrant Infotech India (P) Ltd

ITA - 319 / 2013HC Delhi26 Jul 2013
Section 15C

…ot a mere reconstruction or splitting up of the business in existence. The aforesaid finding is in accord with the decision of the Supreme Court 2013:DHC:7856-DB in Textile Machinery Corporation Limited versus Commissioner of Income Tax, West Bengal, (1977) 107 ITR 195 wherein the Supreme Court upheld the contention of the assessee therein that a new industrial undertaking had been established as it was housed in a separate building, industrial licence had been obtained and new and independent plant and machinery had been installed. It was observed as under " No hard and fast rule can be laid down. Trade and in…

Commissioner of Income Tax-V vs. Quadrant Infotech India (P) Ltd

ITA - 317 / 2013HC Delhi26 Jul 2013
Section 15C

…ot a mere reconstruction or splitting up of the business in existence. The aforesaid finding is in accord with the decision of the Supreme Court 2013:DHC:7856-DB in Textile Machinery Corporation Limited versus Commissioner of Income Tax, West Bengal, (1977) 107 ITR 195 wherein the Supreme Court upheld the contention of the assessee therein that a new industrial undertaking had been established as it was housed in a separate building, industrial licence had been obtained and new and independent plant and machinery had been installed. It was observed as under " No hard and fast rule can be laid down. Trade and in…

Commissioner of Income Tax-IV vs. Delhi Press Patra Prakashan Ltd

ITA-480/2005HC Delhi31 May 2013
For Appellant: Mr N.P. SahniFor Respondent: Mr O.P. Dua, Sr. Adv. with Ms Babita
Section 143(1)Section 260ASection 80

…ed by importing new machinery from overseas and were in addition to the facilities already existing in Unit No.1. The learned counsel for the assessee relied on the decision of the Supreme Court in the case of Textile Machinery Corporation Ltd. v. CIT: (1977) 107 ITR 195 (SC) in support of his contention that in order for a new industrial undertaking to be established, there must be an emergence of a physically separate industrial Unit which may exist on its own as a viable Unit. It was submitted that this condition was fulfilled as Unit Nos.2 & 3 were capable to carry on their activity independent of Unit No. 1.…

Commissioner of Income Tax-IV vs. Delhi Press Patra Prakashan Ltd

ITA-302/2002HC Delhi31 May 2013
For Appellant: Mr N.P. SahniFor Respondent: Mr O.P. Dua, Sr. Adv. with Ms Babita
Section 143(1)Section 260ASection 80

…ed by importing new machinery from overseas and were in addition to the facilities already existing in Unit No.1. The learned counsel for the assessee relied on the decision of the Supreme Court in the case of Textile Machinery Corporation Ltd. v. CIT: (1977) 107 ITR 195 (SC) in support of his contention that in order for a new industrial undertaking to be established, there must be an emergence of a physically separate industrial Unit which may exist on its own as a viable Unit. It was submitted that this condition was fulfilled as Unit Nos.2 & 3 were capable to carry on their activity independent of Unit No. 1.…

Commissioner of Income Tax-IV vs. Delhi Press Patra Prakashan Ltd

ITA-151/2002HC Delhi31 May 2013
For Appellant: Mr N.P. SahniFor Respondent: Mr O.P. Dua, Sr. Adv. with Ms Babita
Section 143(1)Section 260ASection 80

…ed by importing new machinery from overseas and were in addition to the facilities already existing in Unit No.1. The learned counsel for the assessee relied on the decision of the Supreme Court in the case of Textile Machinery Corporation Ltd. v. CIT: (1977) 107 ITR 195 (SC) in support of his contention that in order for a new industrial undertaking to be established, there must be an emergence of a physically separate industrial Unit which may exist on its own as a viable Unit. It was submitted that this condition was fulfilled as Unit Nos.2 & 3 were capable to carry on their activity independent of Unit No. 1.…

Commissioner of Income Tax vs. M/S Delhi Press Patra Prakashan Ltd

ITR-49-50/1996HC Delhi31 May 2013
For Appellant: Mr N.P. SahniFor Respondent: Mr O.P. Dua, Sr. Adv. with Ms Babita
Section 143(1)Section 260ASection 80

…ed by importing new machinery from overseas and were in addition to the facilities already existing in Unit No.1. The learned counsel for the assessee relied on the decision of the Supreme Court in the case of Textile Machinery Corporation Ltd. v. CIT: (1977) 107 ITR 195 (SC) in support of his contention that in order for a new industrial undertaking to be established, there must be an emergence of a physically separate industrial Unit which may exist on its own as a viable Unit. It was submitted that this condition was fulfilled as Unit Nos.2 & 3 were capable to carry on their activity independent of Unit No. 1.…

The Commissioner of Income Tax vs. Delhi Press Patra Prakashan Lt

ITA - 480 / 2005HC Delhi31 May 2013
For Appellant: Mr N.P. SahniFor Respondent: Mr O.P. Dua, Sr. Adv. with Ms Babita
Section 143(1)Section 260ASection 80

…ed by importing new machinery from overseas and were in addition to the facilities already existing in Unit No.1. The learned counsel for the assessee relied on the decision of the Supreme Court in the case of Textile Machinery Corporation Ltd. v. CIT: (1977) 107 ITR 195 (SC) in support of his contention that in order for a new industrial undertaking to be established, there must be an emergence of a physically separate industrial Unit which may exist on its own as a viable Unit. It was submitted that this condition was fulfilled as Unit Nos.2 & 3 were capable to carry on their activity independent of Unit No. 1.…

CIT vs. Delhi Press Patra Prakashan Ltd

ITA - 302 / 2002HC Delhi31 May 2013
For Appellant: Mr N.P. SahniFor Respondent: Mr O.P. Dua, Sr. Adv. with Ms Babita
Section 143(1)Section 260ASection 80

…ed by importing new machinery from overseas and were in addition to the facilities already existing in Unit No.1. The learned counsel for the assessee relied on the decision of the Supreme Court in the case of Textile Machinery Corporation Ltd. v. CIT: (1977) 107 ITR 195 (SC) in support of his contention that in order for a new industrial undertaking to be established, there must be an emergence of a physically separate industrial Unit which may exist on its own as a viable Unit. It was submitted that this condition was fulfilled as Unit Nos.2 & 3 were capable to carry on their activity independent of Unit No. 1.…

Commissioner of Income Tax

ITA/302/2002HC Delhi31 May 2013
For Appellant: Mr N.P. SahniFor Respondent: Mr O.P. Dua, Sr. Adv. with Ms Babita
Section 143(1)Section 260ASection 80

…ed by importing new machinery from overseas and were in addition to the facilities already existing in Unit No.1. The learned counsel for the assessee relied on the decision of the Supreme Court in the case of Textile Machinery Corporation Ltd. v. CIT: (1977) 107 ITR 195 (SC) in support of his contention that in order for a new industrial undertaking to be established, there must be an emergence of a physically separate industrial Unit which may exist on its own as a viable Unit. It was submitted that this condition was fulfilled as Unit Nos.2 & 3 were capable to carry on their activity independent of Unit No. 1.…