MOHAN DAIRY Vs. DY. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THE appeal has been directed by the assessed against the order of the Commissioner (Appeals) dated 29 -12 -1997, pertaining to assessment year 1993 -94.

(2.) GROUND No. 1 raised by the assessed relates to the disallowance of deduction under sections 80 -I and 80 -IA of the Act.

(3.) BRIEFLY , the facts of the case are that the assessed is a firm. In the past, it was trading in milk. In the year under consideration, apart from trading in milk, the assessed also started the business of manufacture of ghee and skimmed milk under the name and style of M/s. Mohan Industries. In addition, the assessed also took over the business of M/s. Mohan Cold Storage which was separately assessed firm up to assessment year 1992 -93. When the assessed was asked as to why the business of the cold storage has been taken over by the assessed, it was stated that all the partners of the assessed -firm were partners in M/s. Mohan Cold Storage and their shareholding was the same. It was Therefore, thought proper to take over the business of M/s. Mohan Cold Storage. As the cold storage was taken over by the assessed -firm, it claimed deduction under sections 80 -I and 80 -IA of the Act on the profits of the cold storage. The assessing officer examined the claim of the assessed but declined to allow the same on the following reasons :