Law:

Section:

Section 84 (Now section 80J) of the Income-tax Act, 1961 [Corresponding to section 15C of Indian Income-tax Act, 1922] - Deductions - Profits and gains from new industrial undertakings, ships or hotels etc. - Assessment years 1960-61 to 1963-64 - Assessee started new industrial undertaking in old building which was taken on sub-lease - Tribunal did not apply its mind to question whether or not assessee occupied premises on leave and licence basis and granted relief under section 15C of 1922 Act or section 84 of 1961 Act on ground that lease or sub-lease did not constitute transfer - Whether before granting relief, Tribunal should have decided question whether or not there was any transfer of premises to assessee when it started its new industrial undertaking and for said purpose, it would have to ascertain nature of 'occupancy title' of assessee - Held, yes - Whether, therefore, view taken by Tribunal was not justified - Held, yes (Matter remanded back) FACTS The assessee started new industrial undertaking in old building which was taken by assessee on sub-lease. The ITO held that the assessee was not entitled to relief under section 15C of the 1922 Act. The AAC allowed the relief on the ground that the original lessee had acquired the premises on leave and licence basis and thus the assessee had not acquired any right over the property. The Tribunal did not apply its mind to the question whether or not the assessee occupied the premises on leave and licence basis suggested by the AAC, because, in its view, the assessee, even if it was a sub-lessee, could not be denied the benefit of section 15C of the Act of 1922 or section 84 of the Act of 1961 since a lease or a sub-lease in the view of the Tribunal did not constitute a transfer. On reference : HELD It would be necessary for the Tribunal to decide whether or not there was any transfer of the premises to the assessee when it started its new industrial undertaking. For this purpose, it would have to ascertain the nature of the 'occupancy title' of the assessee. The Tribunal was, in error in taking the view that the utilisation of the building by the assessee in its new industrial undertaking made no difference…

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