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, etc. – Assessment year 1961-62 – Whether expression 'machinery or plant used in any business' occurring in section 15C(2)(i) of 1922 Act means 'machinery or plant used in a business anywhere else in World' - Held, yes – Whether in absence of any provision for fixing percentage of valuation being found in section 15C(2)(i) of 1922 Act, it will not be possible to decide question by reference to certain percentage which has been fixed in Explanation to section 80J which has been incorporated for first time and has been brought on statute book for first time in 1961 Act - Held, yes – Whether where it had not been established by relevant material that reconditioned machinery which had been imported by assessee from UK had been previously used in any business either in UK or in India prior to its installations in assessee's factory and where Tribunal had recorded a finding that said reconditioned machinery, though it formed important part of assessee's block, was not nucleus around which new industrial undertaking was formed, assessee would be entitled to benefit of section 15C of 1922 Act - Held, yes FACTS The assessee-company was a manufacturing company. The assessee had purchased machinery and also imported reconditioned machinery. The ITO accepted assessee's claim for exemption under section 15C of the 1922 Act. The Commissioner invoked the provisions of section 33B of the 1922 Act as he took the view that ITO had wrongly applied the provisions of section 15C of the 1922 Act. Negativing the contention urged by the assessee that reconditioned machinery could not be regarded as second-hand machinery, he took the view that the reconditioned machinery could not be regarded as new one and that it was not necessary that the previous use of such second-hand machinery must be in India. He held that the assessee-company by using in its manufacture, machinery, which was second-hand, had been formed by the transfer to a new business, of machinery of plant previously used in another business and that,…

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