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Issues Involved:
Interpretation of deduction under section 80J of the Income-tax Act, 1961, read with rule 19A of the Income-tax Rules, 1962 for the second unit of a cold storage for the assessment year 1970-71. Judgment Details: The assessee, a company, claimed deduction under section 80J of the Income-tax Act, 1961, for the assessment year 1970-71 regarding the second unit of a cold storage. The Income Tax Officer (ITO) completed the assessment without discussing the issue of deduction under section 80J. The assessee appealed to the Appellate Assistant Commissioner (AAC) who rejected the claim based on the use of old plant and machinery in the new unit. The Tribunal, however, found that the assessee had invested in setting up the second unit separately and was entitled to the deduction under section 80J. The Tribunal emphasized that the old assets used did not exceed the statutory limit, as per the Explanation to sub-section (4) of section 80J. The Tribunal noted that the authorities below had wrongly rejected the claim by not considering the separate nature of the second unit and the allocation of common assets between the two units. The High Court referred to the conditions of section 80J, which aim to encourage new industrial undertakings. The Court highlighted that the purpose is to provide relief for separate and distinct undertakings. The Court considered previous decisions but focused on the fact that the capital employed could be apportioned even without separate books of account. The Court agreed with the Tribunal's decision, stating that the assessee was entitled to the deduction under section 80J based on the facts and circumstances of the case. In conclusion, the High Court upheld the Tribunal's decision in favor of the assessee, emphasizing that the apportionment of capital was feasible even without separate books of account. Each party was directed to bear its own costs. *SUDHINDRA MOHAN GUHA J.-I agree.*
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