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 new industrial undertakings, ships or hotels etc. - Assessment year 1960-61 - Assessee-company had four manufacturing units - In relevant assessment year, one more unit was established and there were also extensions to existing factories - Assessee claimed relief under section 15C of 1922 Act in respect of fresh capital outlay as well as additional investments in form of extensions to existing factory premises - Whether in view of decision in Textile Machinery Corporation Ltd. v. CIT [1977] 107 ITR 195 (SC), assessee's claim was to be allowed - Held, yes FACTS The assessee-company had four manufacturing units. In the relevant assessment year, one more center was established and there were also extensions to the existing factories. The respondent-assessee claimed relief under section 15C of 1922 Act in respect of the fresh capital outlay as well as of the additional investment in the form of extensions to the existing factory premises, installation of new plant and machinery, etc. The ITO refused to allow the relief. On second appeal, the Tribunal held that in view of the nature of the substantial investments, it could not be said that the units were not new industrial units by themselves. It further held that these units had been set up side by side with the old ones and had added to the respondent's total output of aluminium ingots. The Tribunal accordingly, concluded that the respondent was entitled to the relief under section 15C of 1922 Act. On reference, the High Court upheld the Tribunal's decision. On appeal to the Supreme Court : HELD Following the decision of this Court in the case of Textile Machinery Corporation Ltd. v. CIT [1977] 107 ITR 195 (SC), the respondents' claim was allowed. The instant appeal was dismissed accordingly. Note : The case has been decided in favour of the assessee. CASE REVIEW Decision of the Calcutta High Court in CIT v. Indian Aluminium Co. Ltd. [1973] 88 ITR 257, affirmed. JUDGMENT Goswami, J.-This appeal by the Commissioner of Income-tax, West Bengal, Calcutta, on certificate is…

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