Law: Income Tax Act, 1922

Section: 15C,66(1),15C(2)(i),10,23A

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 - Assessment years 1958-59 and 1959-60 - Assessee, a heavy engineering concern, set up two separate new units to manufacture articles which were to be used by assessee's existing units - Whether since new industrial undertakings were separate and independent production units in sense that commodities produced were commercially tangible products and undertakings could be carried on separately without complete absorption and losing their identity in old business, they were not to be treated as being formed by reconstruction of old business - Held, yes - Whether, therefore, assessee was entitled to exemption under section 15C of 1922 Act in respect of new units - Held, yes FACTS The assessee, a heavy engineering concern set up two new units, a steel foundry division and a jute mill division. The steel foundry division started manufacturing articles which the assessee was buying from outside in earlier years. In the Jute mill division parts were made out of the raw material supplied by the boiler division by machining and forging them and then were given back to the boiler division of the assessee. The assessee claimed relief under section 15 of the 1922 Act in respect of the its profits and gains derived from the new units. The ITO and the AAC held the undertakings as expansion and reconstruction of the business already existing and hence the assessee was not entitled to exemption under section 15C of the 1922 Act. The Tribunal, however, accepted the claim for exemption under section 15C of the 1922 Act. The High Court reversed the decision of the Tribunal. On appeal to the Supreme Court : HELD Section 15C is an exemption section. The benefit granted under this section is a partial benefit so far as the quantum of the exempted profits of the new industrial undertaking as also for a limited period or periods as specified in the section. If the two industrial undertakings, about the existence of which there can be no controversy, as found by the Tribunal, could not be held to be…

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