Law:

Section:

Section 80J of the Income-tax Act, 1961 - Deductions - Profits and gains from newly established industrial undertakings - Assessment years 1970-71 to 1972-73 - Assessee, which was a Government company, did not manufacture tractors - Nature of its business was that it assembled components, received by it from abroad, so as to complete tractor - Whether activity of assessee amounted to manufacture/producing of articles and, thus, was entitled to deduction under section 80J - Held, yes Section 80-I of the Income-tax Act, 1961 - Deduction - Profits and gains from industrial undertaking after a certain date, etc. - Whether in view of facts mentioned under the head 'Deductions - Profits and gains from newly established industrial undertakings', assessee was entitled to relief under section 80-I - Held, yes FACTS The assessee was a Government company. During the previous years relevant to the assessment years 1970-71 to 1972-73, though the assessee did not itself manufacture tractors or any parts thereof, it received tractors from abroad in knocked down or semi-knocked down condition. The nature of the assessee's business was that in the first instance, it assembled the components and then assembled those components so as to complete the tractor. For the assessment years in question assessee claimed deductions under sections 80I and 80J. The ITO disallowed the assessee's claim. However, on appeal the Tribunal held that the assessee was a 'newly established industrial undertaking' and, thus, was entitled to deduction under sections 80I and 80J. On reference : HELD The object of sections 80I and 80J is to provide relief and encouragement to newly established industrial undertakings and to certain other specified type of industrial undertakings. The trend of decisions under section 80J is towards a liberal construction of the section. In the light of this trend, in the instant case, the activity of the assessee amounted to manufacture/producing of articles and, therefore, it was entitled to benefit under sections 80I and 80J. Section 37(1) of the Income-tax Act, 1961 - Business expenditure - Allowability of - Assessment year 1969-70 - Assessee was a Government company…

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