TMI Blog1981 (3) TMI 52X X X X Extracts X X X X X X X X Extracts X X X X ..... sessment year 1970-71 ? " The assessee is a company and the relevant assessment year is 1970-71, corresponding previous year being the calendar year which ended on December 31, 1970. The relevant assessment was completed by the ITO by taking the status of the assessee-company as a company in which the public were not substantially interested. However, in the body of the assessment order there was no discussion either on this issue or on the other relating to the rebate under s. 80J of the I.T. Act, 1961, in respect of the new chamber in the cold storage. Being aggrieved by the said decision, the assessee went up in appeal before the AAC. The AAC rejected the contention of the assessee. Relating to the deduction under s. 80J of the I.T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssment year 1969-70, the Tribunal found that the AAC refused the benefit of the rebate under s. 80J for the assessment year 1969-70, when such benefit was first claimed because the air-cooler machine remained the same and the additions were made to the racks, buildings, some overhead coils, liquid heater, etc., and also because separate books of account for the unit not having been maintained, the exact amount of capital introduced in the new unit was not readily available. After examining the provisions of s. 80J and the relevant decisions, the Tribunal was of the view that in view of the Explanation to sub-s. (4) of s. 80J of the Act, the total value of the old assets, if used for the second unit of the cold storage, did not exceed the st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y discussed earlier. The authorities below had not given any finding that the second cold storage unit was formed by splitting up or reconstruction of the existing unit nor was there any finding that it was formed by the transfer of assets previously used except for a negligible portion. Hence, to our mind, the assessee company is entitled to the deduction under section 80J of the Act. " Upon these, the question as indicated above has been referred to this court. Though numerous decisions are there, the principles of the scope of s. 80J of the I.T. Act, 1961, are fairly well settled. We are concerned with sub-s. (4) of s. 80J of the Act, which, inter alia, provides as follows: (4) This section applies to any industrial undertaking whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... business of the industrial undertaking, the value of the building or part so transferred shall not be taken into account in computing the capital employed in the industrial undertaking. ......... Explanation 1. For the purposes of clause (ii) of this sub-section, any machinery or plant which was used outside India by any person other than the assessee shall not be regarded as machinery or plant previously used for any purpose, if the following conditions are fulfilled, namely: (a) such machinery or plant was not, at any time, previous to the date of the installation by the assessee, used in India; (b) such machinery or plant is imported into India from any country outside India; and (c) no deduction on account of depreciation in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it or capital employed would disentitle the assessee in claiming relief under s. 80J of the Act, if otherwise entitled to. Our attention was drawn to the observations of this court in the case of CIT v. Dunlop Rubber Co. (India) Ltd. [1977] 107 ITR 182. It is not necessary, in our opinion, to discuss these decisions in detail. It is true that certain percentage of the profit had to be given relief and that profit would have to be determined after taking into consideration the capital employed. Now, in this case though no separate books as such were maintained, the old machinery that was being used was only to the extent of Rs. 31,603 and this was the written down value. Eliminating that, the other amount of money for setting up new indust ..... X X X X Extracts X X X X X X X X Extracts X X X X
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