Law:

Section:

Section 80J of the Income-tax Act, 1961 - Deductions - Profits and gains from a new industrial undertakings, ships or hotels, etc. - Assessment year 1975-76 - Assessee-firm claimed deduction under section 80J - Tribunal found that business carried on by assessee-firm was a new business and that one 'V' had transferred machinery belonging to his individual business to assessee-firm - It was, therefore, viewed that provisions of section 80J(4)(ii) were attracted and assessee was not entitled to relief under section 80J - Whether aforesaid findings recorded by Tribunal were essentially findings of fact, and therefore, Tribunal was justified in holding that assessee was not entitled to deduction under section 80J as its claim was hit by provisions of section 80J(4)(ii) - Held, yes FACTS The assessee-firm was deriving income from manufacture of fiberglass which was supplied to the company B. For the assessment year 1975-76, the assessee claimed deduction of certain amount under section 80J. A similar deduction had been claimed in the assessment year 1974-75 also. It was disallowed by the Tribunal on the finding that one 'V', who was doing business earlier in his individual capacity, had subsequently transferred machinery to the assessee-firm and since the assessee-firm was a new business, the provisions of section 80J(4)(ii) were attracted and the benefit of section 80J consequently could not be claimed by the assessee. Relying on its finding given in the order relating to the assessment year 1974-75, the Tribunal disallowed the claim of the assessee in the relevant assessment year also. On reference: HELD The findings recorded by the Tribunal that the business carried on by the assessee was a new business and that 'V' transferred machinery belonging to his indivioual business were essentially finding of fact. In view of these findings, there seemed to be no doubt that the provisions of section 80J(4)(ii) were clearly attracted and the Tribunal could not be said to have committed any error in taking the view which it did. Therefore, the Tribunal was correct in law in holding that the assessee's claim was hit by section 80J(4)(ii), and consequently, the assessee was…

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