Law:

Section:

Section 80J of the Income-tax Act, 1961 (Corresponding to section 15C of Indian Income-tax Act, 1922) - Deductions - Profits & gains from newly established industrial undertakings ships, hotels etc. - Assessment year 1955-56 - Assessee assembled certain vehicles from out of 'complete knocked down' packs imported from Germany and claimed relief under section 15C of 1922 Act in respect of profits arising out of sale of bus/truck chassis assembled during that year - ITO rejected assessee's claim on ground that company having done only assembling of certain manufactured parts could not be treated to have itself manufactured or produced any articles in order to entitle it to relief under section 15C - AAC held that since assembly of automobiles from imported parts was merely first stage in company's scheme for manufacture of automobiles, company should be held to have begun to manufacture or produce articles during relevant accounting period - Tribunal held that assembly of trucks did not fall within words 'manufacture' or produce' as used in section 15C - Whetherassembling of automotive bus/truck chassis from imported parts in a knocked down condition would give rise to an article which was totally different from parts so even though the component parts from which automotive chassis was made, retained their individual identity in whole article which was thus manufactured or produced - Held, yes - Whether assembly stage was a part and parcel of entire industrial undertaking of assessee whereby they manufactured or produced bus truck/chassis which were wholly indigenous - Held, yes - Whether assembly stage upon facts was not a different industrial undertaking but one intimately connected with subsequent stages whereby Indian bus/truck chassis were progressively manufactured and whole was one integrated scheme ; one programme and notional division of that programme into two industrial undertakings was unjustified - Held, yes - Whether, therefore, in instant case, assembling of imported parts into a finished chassis amounted to manufacture or production of an article within meaning of section 15C(2)(ii) of 1922 Act - Held, yes FACTS Under a scheme approved by the…

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