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Issues:
Admissibility of claim under section 80J and 80HH for a private limited company manufacturing aluminium conductors. Analysis: In the assessment year 1975-76, the ITO allowed deductions under section 80HH and 80J for the company. However, the Commissioner later held that the deductions were not justified, leading to the company filing an appeal. The issue revolved around whether the company met the criteria for these deductions. For the assessment year 1976-77, the company claimed deductions under section 80J and 80HH, but the ITO denied them, citing non-compliance with conditions related to the number of workers employed and the formation of the industry. The AAC disagreed with the ITO and granted the deductions, prompting the Revenue to appeal against this decision. The company had taken over a business involved in manufacturing aluminium conductors, which influenced the decision regarding the admissibility of deductions. The Commissioner disallowed the claim based on the transfer of machinery and plant from an existing business and the insufficient number of workers employed in the manufacturing process. The AAC's rationale for granting the relief was based on the company's actions post-acquisition, emphasizing that the previous business had not commenced production. However, the Revenue argued that the company did not meet the statutory requirements for the deductions under sections 80J and 80HH. The Tribunal emphasized the necessity for the industrial undertaking to meet specific conditions to claim deductions under section 80HH and 80J. Referring to past precedents, the Tribunal clarified that the employment of ten or more workers throughout the relevant period was a crucial factor. As the company failed to satisfy this requirement, the Tribunal upheld the Commissioner's decision for the year 1975-76 and dismissed the company's appeal. Additionally, the Revenue's appeal for the year 1976-77 was allowed, overturning the AAC's decision and reinstating the ITO's ruling.
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