Law: Income Tax Act, 1922

Section: 15BB(2)(e),15BB,15BB(4)

Income-tax Act, 1922 -- Section 15BB(4) --Exemption -- Tax holiday -- Industrial undertaking -- Use of new building, whether condition precedent for entitlement to exemption -- Held no -- Business undertaking not formed by transfer of a building which was in use before 1st April, 1959 -- Whether entitled to exemption -- Held yes -- "Property, "Building" distinction between --Tax holiday for new industry -- Use of new building not a condition to entitle a person to exemption -- Business undertaking asking for exemption should not be one formed by transfer of a building which was not in use before:- JUDGMENT The judgment of the court was delivered by MUSHTAQ HUSSAIN J.--Messrs K.S.B. Pumps Company Limited, petitioner, is an industrial undertaking which was incorporated as a private limited company on 18th July. 1959 under the Companies Act, 1913, with a subscribed and paid-up capital of Rs. 40,00,000.00. Its business was to manufacture Centrifugal and Deepwell Turbine Pumps. The Company obtained the lease of a building within the precincts of the Pakistan Ordinance Factory, Wah and installed its machinery in it. This step was taken to expedite the production of the pumps as the construction of a building presented certain impediments and would have taken quite some time. The result was that the Company went into commercial production on 15th October, 1960. 2. On 14th May, 1962 the petitioner-company made an application through Messrs. A.F. Ferguson and Company, Chartered Accountants to the Central Board of Revenue, Government of Pakistan for exemption from income-tax under section 15BB (2)(e) of the Income-tax Act. The matter remained under the consideration of the Board for more than two years. Meanwhile the petitioner completed the construction of a factory-building at Hasan Abdal and shifted the plant and machinery from the leased building within the precincts of the Pakistan Ordnance Factory, Wah, to this newly constructed building in July, 1964. 3. The Board remained seized of the application till 12th November,1964 when by an order (copy Annexure G') exemption from income-tax for the period from 1st July, 1964 to 15th October 1964, only was communicated to…

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