Law:

Section:

I. Section 80-J of the Income-tax Act 1961 - Deductions - Profits and gains from new industrial undertakings, ships or hotels etc. - Whether whenever an assessee claims relief under section 80J, it will have to plead and establish that a new unit has come into existence which independently produces articles of whatsoever nature and that new unit is not dependent upon old existing unit - Held, yes - Whether, therefore, where assessee had made heavy investments in existing unit which increased production capacity of assessee, special deduction under section 80J could not be allowed - Held, yes FACTS The assessee had installed a new transformer, a new furnace and new motors in the existing factory premises. It involved heavy investment; the licensed capacity of the assessee increased from 5,000 tonnes to 6,250 tonnes per annum. The nature of the goods produced continued to be the same. The assessee contended that those new installations resulted in a new undertaking and, therefore, under section 80J, the assessee was entitled to the allowance. The ITO rejected the claim on the ground that the assessee had only extended its existing undertaking but no new undertaking was installed. This was affirmed by the Commissioner (Appeals) and was further affirmed by the Tribunal. On reference : HELD The primary purpose of section 80J is to grant relief to a new industrial undertaking. Therefore, whenever an assessee claims relief under section 80J, the assessee will have to plead and establish that a new unit has come into existence which independently produces articles of whatsoever nature and that this new unit is not dependent upon the old existing unit, in the sense that the new unit cannot be equated as an expansion of the old unit. The basic question was whether the assessee had established a new unit of manufacture and whether it was an integrated unit. Unfortunately for the assessee, there was no such plea, in the instant case. The assessee relied upon the fact that it had invested large amounts when compared to the initial investment on the manufacturing unit and these new installations had contributed to the production capacity of the assessee. But that was not…

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