Law:

Section:

Section 84 [now section 80J with effect from 5-4-1968] of the income-tax act, 1961-Deductions-Profits and gains from newly established industrial undertakings-Assessee-company obtained license for establishing a fourth kiln for manufacture of cement entailing substantial investment of capital, employment of additional labour and increase in its production capacity-Whether assessee entitled to relief under section 84/80j-Held, on facts, yes Facts The assessee-company was granted a license for establishing a fourth kiln for manufacturing Portland cement. It invested Rs. 1 crore in the installation of this kiln entailing the increase in its production capacity by 2 lakh tons and the employment of additional force. The assessee claimed relief under section 84/80J qua the fourth kiln for the assessment years 1964-65 to 1970-71 and the same was eventually allowed by the Tribunal. On reference: Held The assessee-company had satisfied all the conditions for claiming relief under section 84/80J. It had invested fresh capital and employed additional labour force in the installation of the fourth kiln. The expanded unit had a separate and distinct identity and there was substantial increase in its production resulting in profits. The Tribunal was, therefore, right in granting the impugned relief. . Case review Textile Machmery Corpn. Ltd. v. CIT [1977] 107 ITR 195 (SO and CIT v. Indian Aluminium Co. Ltd. [1977] 108 ITR 367(SC) followed. Section 37(1) of the income-tax act, 1961-Business expenditure-Caco formed at government's behest to ensure smooth-implementation of cement de-control scheme and equitable distribution and fixation of prices and allocation-Whether contributions made to caco were deductible as business expenditure-Held, on facts, yes Facts After the de-control of cement from 1-1-1966 and at the Government's behest, the cement manufacturers formed a voluntary organisation, known as Cement Allocation and Co-ordinating Organisation (CACO), to "ensure smooth implementation of the cement de-control scheme for equitable distribution for consumers throughout the country. CACO formed schemes for fixation of prices and allocation and distribution of cement which…

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