Law:

Section:

Section 84 (Now Section 80J) of the Income-tax Act, 1961 - Deductions - Profits and gains from new industrial undertakings ships or hotels etc. - Assessment year 1963-64 - Assessee-firm derived income from newly setup industry - ITO apportioned amount of exemption under section 84 in hands of partners of assessee-firm - Whether it was assessee firm which was entitled to benefits of section 84 and fact that ITO granted relief in hands of partners was no reason to deny benefit to which assessee was clearly entitled - Held, yes Section 88 (Now Section 80G) of the Income-tax Act, 1961 - Deductions - Donation to certain funds, charitable institutions - Assessment year 1963-64 - Whether prima facie any donation made by a firm would be on account of firm itself and deduction on account of same must be given to firm and fact that ITO granted deduction in hands of partners could not be ground to deny deduction to firm - Held, yes FACTS The assessee, a registared firm, gave donations. It also derived income from a newly set up industry. The assessee claimed that it was entitled to rebate in respect of the aforesaid items, under sections 88 and 84. The ITO proceeded to apportion the amount of exemption under section 84 in the hands of individual partners. He also apportioned the total donation also in the hands of individual partners. The ITO, therefore, did not actually allow the rebate under section 88 and relief under section 84 to the assessee. The AAC rejected the claim of the assessee on the ground that necessary exemption and relief under sections 88 and 84 had already been granted to the individual partners and neither of these sections are meant for granting of exemption and relief twice over. The Tribunal allowed the claims of the assessee. On reference: HELD The language of section 84 is quite clear. It provides that It provides that income-tax is not payable by an assessee on so much of the profits and gains derived from any industrial undertaking, to which that section applies, as does not exceed 6 percent per annum on the capital employed in such undertaking or business. There was no dispute that the industrial undertaking commenced by the assessee in this…

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