Law:

Section:

Section 80J of the Income-tax Act, 1961 - Deductions - Profits and gains from new industrial undertakings, ships or hotels etc. - Assessment year 1972-73 - Whether cost of building occurring in Explanation to section 80J would not mean only superstructure but would also include cost of land married to superstructure on which superstructure stands - Held, yes FACTS The assessee-company was the manufacturer of knitted fabrics. In the year of account relevant to the assessment year in question the assessee purchased an old building. Thereafter it installed newly purchased machinery and claimed relief under section 80J. The ITO found that the building which the assessee had purchased was used previously for carrying on some other business and invoked theExplanation to section 80J to reject the claim made by the assessee as according to him the value of the building used in some other business previously was more than 20 per cent of the value of the building, plant and machinery used in the new industrial undertaking. According to this view the land under the building was very much part of the building and for the purposes of considering theExplanation the value of the superstructure as well as the value of the land underneath it had to be considered and if so considered the assessee was not entitled to relief under section 80J. The Tribunal held that the building referred only to the superstructure and not to the land beneath it and, therefore, the assessee was entitled to relief under section 80J. On reference : HELD The argument of the assessee that Explanation (b) to section 80J uses the phrase 'any building or any part thereof' for the purposes of hotel business and that part of a building can only refer to the part of the superstructure of a building and can have no reference to the land underneath the superstructure, had a plausible attractiveness. But if it was realised that the Explanation contains a workable rule of thumb for the purposes of allowing relief to an assessee who would be disentitled to such relief by the conditions prescribed under sub-sections (4) and (6) of section 80J, it would be realised that even a part of a building can be valued and…

Deprecated: trim(): Passing null to parameter #1 ($string) of type string is deprecated in /home/digixyei/sldsystempk.com/view/master-layout/view_case.php on line 492