Law:

Section:

Section 80J of the Income-tax Act, 1961 [Corresponding to section 15C of the Indian Income-tax Act, 1922] - Deductions - Profits and gains from newly established industrial undertakings ships or hotels etc. - Assessment years 1958-59 and 1959-60 - Assessee company took on monthly lease a huge compound belonging to another company 'P' - Factory of assessee was located in godown which was belonging to company 'P' and used by latter for its business purpose - Whether words "transfer to a new business of building" used in section 15C(2)(i) of 1922 Act are wide enough to include cases where transfer is created by creation of lease in building in favour of new business or person carrying on new business - Held, yes - Whether word "building" in section 15C(2)(i) of 1922 Act will include not only full rights of ownership but any right to or interest in building - Held, yes - Whether, therefore, hiring by 'P' to assessee of aforesaid go down amounted to transfer to latter within meaning of phrase 'transfer to new business of building previously used in any other business' in section 15C(2)(i) of 1922 Act and, as such, assessee was not entitled to relief under section 15C of 1922 Act - Held, yes Words and phrases Words "transfer to a new business of building" as occurred in section 15C(2)(i) of the Indian Income-tax Act, 1922. FACTS The assessee company took on monthly lease a huge compound pertaining to and used for its business by another company 'P'. The factory of the assessee was located in the godown which was belonging to 'P' and it was used by the latter company as its godown for business purposes. The production was commenced by the assessee sometime in August 1954. For the assessment years 1958-59 and 1959-60, the assessee company claimed relief under section 15C of the 1922 Act. The ITO disallowed the assessee's claim. The Tribunal upheld the order of the ITO. On reference : HELD The scheme of the section 15C of the 1922 Act is to encourage new industrial undertakings provided they fulfil the conditions mentioned in the various clauses of the sub-section. In order to be entitled to exemption an assessee must strictly come within the terms of the provisions…

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