TMI Blog1977 (7) TMI 44X X X X Extracts X X X X X X X X Extracts X X X X ..... ss of Kopran Chemical Company now carried on by Ramanlal V. Shah at 18, 3rd Pasta Lane, Colaba, Bombay-5. and accordingly to enter into and carry into effect with or without modification an agreement with the said Ramanlal Vadilal Shah in the terms of the draft which has for the purpose of identification been initialled by the subscribers to the memorandum and articles of association." By an agreement dated December 18, 1958, the assessee purchased, stock-in-trade and raw materials of Kopran Chemical Co. from its proprietor, Ramanlal Vadilal Shah. Kopran Chemical Company was manufacturing tooth-paste only. The assessee-company sold away stocks of tooth-paste taken over by it. The assessee did not manufacture tooth-paste but started the b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... siness of manufacture of pharmaceutical goods. Production of pharmaceutical goods was started by the assessee-company on August 27, 1958, while the rotary tablet machine of the value of Rs. 19,601 was purchased by the assessee-company from Lovely Products on November 18, 1958, i.e., nearly three months after the commencement of the production. It was the case of the assessee-company that the reconditioned tablet making machine of the value of Rs. 2,987 purchased from Kilburn Co. Pvt. Ltd., even though it was old, was not used in any business. On these facts having regard to the provisions of section 15C of the Indian Income-tax Act, 1922, the assessee-company claimed that its profits to the extent of 6 per cent. of the capital employed in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e submitted that the Tribunal was in error in coming to the conclusion that the assessee was entitled to the benefit of the provisions of section 15C of the Act. His submission is that the industrial undertaking started by the assessee-company was formed by transfer to a new business of part of machinery or plant which was used in a business which was being carried on before April 1, 1948, and he, therefore, submitted that in such a case, clause (i) of sub-section (2) of section 15C has no application and the assessee-company is not entitled to the benefit of the said section. Section 15C provides for exemption from tax of newly established industrial undertakings. The material part of the said section for our present purpose is as under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... et machine of the value of Rs. 19,601 from M/s. Lovely Products. Out of the machinery of the value of Rs. 7,000 purchased from R.V. Shah of Kopran Chemical Company, the assessee-company sold away mixing machine and the electric motor of the value of Rs. 2,500 in the preceding accounting year ending March 31, 1959. According to the assessee the remaining machinery of the value of Rs. 4,500 remained idle and was not used by it for its business purposes. The case of the assessee that the remaining machinery of the value of Rs. 4,500 was not used for the purposes of business has been accepted by the Appellate Assistant Commissioner as well as by the Tribunal. So far as the third item namely, the rotary tablet machine of the value of Rs. 19,6 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ears in respect of the textile department unit since the value of the machinery transferred from the old factory at Sewri formed but a small fraction of the assets employed in the new textile department at Ghatkopar. Thus, looked at from any point of view, the contention of the revenue that the benefit of section 15C(2) is not available to the assessee cannot be accepted. Actually the Tribunal in its order dated January 17, 1966, has given clear findings on questions of fact and if those findings of fact are accepted, there is no scope for arguing that the exemption available under section 15C cannot be availed of by the assessee-company. In the result, our answer to the question referred is in the affirmative and in favour of the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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