Law:

Section:

Section 80J of the Income-tax Act, 1961 - Deductions - Profits and gains from new industrial undertakings, ships or hotels etc. - Assessment year 1971-72 - Assessee company was carrying on business in manufacture and sale of self - Locking nyloc nuts for vehicles - It used to purchase or import nyloc inserts from local sources - During relevant accounting year it set up a plant for manufacture of nyloc inserts and housed said plant in extension of its existing premises - Production of nyloc inserts was used in main factory as components - Whether plant set up for manufacture of nyloc inserts was not reconstruction of business already in existence but a new industrial undertaking and, therefore, assessee was entitled to relief under section 80J - Held, yes Words and phrases: Word 'reconstruction' as occurred in section 80J(4)(i) of the Income-tax Act, 1961 FACTS The assessee company was carrying on business in the manufacture and sale of self-locking nyloc nuts for vehicles. For the purposes of such manufacture, it imported or purchased from local sources nyloc inserts. In the relevant accounting year, the assessee set up a plant for the manufacture of nyloc inserts and commenced that manufacture. For setting up the plant, it raised fresh capital and housed the plant in an extension of its existing premises. The entire production of nyloc inserts was used in the main factory as components for self-locking nyloc nuts. The assessee claimed relief under section 80J in respect of the plant for the manufacture of nyloc inserts. The ITO refused it on the ground that there was no new undertaking. The Tribunal held that a new industrial undertaking had come into being and, therefore, the assessee was entitled to relief under section 80J. On reference, the revenue submitted that in the instant case, there was reconstruction of a business already in existence and, therefore, the relief under section 80J was not available to the assessee. HELD In the decision of the Supreme Court in Textile Machinery Corporation Ltd. v. CIT [1977] 107 ITR 195, "reconstruction" in section 80J(4)(i), has been taken to mean that an undertaking of some definite kind was being carried on 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