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TMI Blog1969 (4) TMI 7X X X X Extracts X X X X X X X X Extracts X X X X ..... of Amritsar which had been carrying on business in its name. It opened a new branch under the style of Ashok Dyeing and Printing Works, opening its new industrial undertaking on October 22, 1957. For this undertaking it constructed a factory building at Rs. 47,221 and installed in it machinery of the value of Rs. 1,47,358. Out of the total value of the machinery, a sum of Rs. 1,05,376 represented purchase of old machinery from several parties, and the remaining sum of Rs. 41,982 was the price of the new machinery. So in regard to this new undertaking the assessee (a) set up a new factory building costing Rs. 47,221, and (b) purchased (i) new machinery of the value of Rs. 41,982, and (ii) old machinery of the value of Rs. 1,05,376. In the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... siness or to somebody else's business, then the exemption would be lost. We have already shown that the intention of the legislature is not at variance with this interpretation. " On a reference claimed by the assessee the learned Tribunal has referred the question as above. In the Act, so far as relevant for the present purpose, sub-sections (1) and (2) of section 15C read : " 15C. (1) Save as otherwise hereinafter provided, the tax shall not be payable by an assessee on so much of the profits or gains derived from any industrial undertaking to which this section applies as do not exceed six per cent. per annum on the capital employed in the undertaking, computed in accordance with such rules as may be made in this behalf by the Cen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ansferring his assets such as building, machinery or plant, previously used in any other of his business, to a new business, but also with a transferee of any such assets on the basis of which he sets up an industrial undertaking. The learned counsel has contended that the admitted fact that the machinery of the value of two-thirds was old machinery purchased from various persons, clearly establishes that the same had been previously used in the business of those from whom the purchases were made. He has pointed out that this was never a matter of controversy before any of the income-tax authorities below. The assessee never questioned this matter of fact before any of the authorities. The second argument in the facts and circumstances of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... siness of building, machinery or plant previously used in any other business " is concerned. There is no justification for confining this part to the owner as transferring to a new business any building, plant or machinery previously used by him in his any other business. He may do that. The same result may come about by another person making a purchase of the previously used building, machinery or plant in the business of the vendor, when that other person sets up his own industrial undertaking with such previously used building, machinery or plant. The learned counsel for the Commissioner of Income-tax in support of his position has refered to Steelsworth Ltd. v. Commissioner of Income-tax. The case deals with section 15C(1) and (2) (i) o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rds of the machinery for the undertaking is an old machinery purchased from various other persons. So the first argument on the side of the assessee cannot be accepted. In the present case a substantial part of the machinery of the undertaking has been an old machinery purchased from other persons and the consequence, as already stated, is that it was previously used for their business by those other persons. So the argument on the side of the assessee cannot be accepted that it is an industrial undertaking not formed by the transfer to it of machinery (substantial part of it old) previously used in the business of those from whom the same was purchased. The case falls under clause (i) of sub-section (2) of section 15C and the exemption a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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