Law: Income Tax Act, 1961

Section: 70,70(27),32A,80HH,80HHA,801,80J

[Indian income Tax Act, 1961].......Sections 70(27), 32A, 80HH, 80HHA, 801 & 80 J - Development allowance and deduction - Claim of the assessee - Rejection of - Assessee was running poultry form and hatcheries where eggs were hatched - Condition precedent for claiming allowances and deduction for a new industrial undertaking - Meaning and import of expression manufacture or produce articles or things occurring in section 32A(2) & 80J of Act - Whether assessee was industrial undertaking to the strict sense of the term and entitled to claim allowances and deduction - Question of - History and leave ground of section 10(27) - Effect of omission of this section by the Finance Act 1975 insertion of section 80JJ in the Act - Rational behind omission and re-enactment - Whether effect of re-enactment provision of section 60JJ was that profit from the business of live-stock and poultry which enjoyed total exemption under section 10(27) of the Act became partially exempt by way of deduction on fulfillment of certain conditions - Held yes - Whether business of hatcheries were neither industrial under taking nor engaged In the business of producing articles or things - Held yes Whether chicks, are articles or things - Held no Whether assessee was industrial under taking and business of hatchery fell within the meaning of section 32A and 80J of the Act- Held no. Section 10(27) of the Act was inserted in the Act through the Finance Act, 1964. The purpose of enacting section 10(27) was to provide incentive to poultry farming, which Includes the business of hatchery, by way of giving exemption from income-tax on income from such business. initially, the said exemption was given for the years 1965, 1966 and 1967. in the year 1967, through the Finance (No.2) Act, the words beginning from the word which to 1967 were omitted. Thus exemption from income- tax was allowed beyond the year 1967. In the year 1975, it was felt that the exemption from income-tax on income from poultry business is capable of being abused by unscrupulous people by showing Income which would otherwise be chargeable to tax, as exempt Income. It was in this background that the mischief was sought to be…

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