G.C. Gupta, J. - (1.) The subject matter of challenge in the appeal is a judgment and order dated 11th August, 2005 passed by the learned Income -tax Appellate Tribunal "B" Bench, Kolkata disposing of three several appeals preferred by the revenue challenging orders passed for three several assessment years, viz. the assessment years 1995 -96, 1996 -97 and 1997 -98. All the three appeals were disposed of by the learned Tribunal by a common judgment. The admitted facts and circumstances of the case are as follows: - - "On 27th September, 1988, the assessee purchased a water treatment chemical plant at Rishra from Indian Explosive Limited at a sum of Rs. 54.55 lakhs. The assessee also purchased new machinery worth Rs. 18.69 lakhs and commenced the water treatment plant at Rishra and continued operation thereof during the accounting year 1988 -89 corresponding to assessment year 1989 -90. In the next financial year, that is to say, in the year 1989 -90 corresponding to assessment year 1990 -91, the assessee installed a plant at Konnagar at a cost of Rs. 6.78 crores. The plant at Rishra was dismantled and the machinery worth Rs. 73.24 lakhs were shifted to Konnagar plant. The question arose whether the assessee was entitled to the benefit under Sec. 80I of the Income -tax Act. The Assessing Officer initially allowed deduction under Sec. 80I but he subsequently reopened the proceeding under Sec. 147 and withdrew the benefit. In an appeal preferred by the assessee, the CIT restored the benefit to the assessee. In an appeal preferred by the revenue, the learned Tribunal has set aside the order of the CIT holding that the assessee is not entitled to deduction under Sec. 80I for the following reasons: - - "the initial year for new industrial undertaking is the assessment year 1989 -90 only and since the machinery which was used was old and more than 20% of the total plant & machinery, it clearly violates one of the conditions which is required to be fulfilled to be entitled for deduction u/s. 80I. Accordingly, we hold that the assessee is not entitled for deduction u/s. 80I in any of the three assessment years 1995 -96, 1996 -97 and 1997 -98."
(2.) Therefore, the assessee has come up in appeal. The following question of law has been formulated by consent of the parties after hearing them: "Is the deduction under Sec. 80I in the subsequent years dependent upon the initial year of production which, according to the learned Tribunal, in this case is the assessment year 1989 -90 -
(3.) In order to answer the question, we have to notice sub -section (1) of Sec. 80I which reads as follows: - - "(1) Where the gross total income of an assessee includes any profits and gains derived from an industrial undertaking or a ship or the business of a hotel [or the business of repairs to ocean -going vessels or other powered craft], to which this Sec. applies, there shall, in accordance with and subject to the provisions of this section, be allowed, in computing the total income of the assessee, a deduction from such profits and gains of an amount equal to 20% thereof: Provided that in the case of an assessee, being a company, the provisions of this sub -section shall have effect [in relation to profits and gains derived from an industrial undertaking or a ship or the business of a hotel] as if for the words "20%", the words "25%" had been substituted.";