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TMI Blog1971 (5) TMI 11X X X X Extracts X X X X X X X X Extracts X X X X ..... r the purposes of tax exemption in accordance with section 15C(1) of the said Act ? (2) Whether, on the facts and in the circumstances of the case, the machineries worth Rs. 2,68,515 was new machinery within the meaning of section 10(2)(vib) of the Indian Income-tax Act, 1922 ?" In order to settle these questions, it is necessary to set out the relevant facts. The assessee is a public limited company. It is engaged in the production of milk foods. For its establishment, it imported machineries from United Kingdom. It is now common ground that 80% of that machinery was absolutely new ; only 20 per cent. of the machinery was reconditioned. There is no evidence that the reconditioned machinery was used in England, after re-conditioning befo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt of this order, for our opinion. So far as the first question of law is concerned, it will be necessary to set out the relevant part of section 15C(2) which applies to an industrial undertaking which " is not formed .... by the transfer to a new business of building, machinery or plant previously used in any other business." The contention of the learned counsel for the department is that we must read this provision along with section 10(2)(vib) and as in section 10(2)(vib) the word " new " occurs before the word " machinery ", we must, for purposes of section 15C, read the word " new " before the word machinery ", and, in any case, by reason of the use of the word " used " before the words " in any other business ", the learned counsel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h the word " machinery ". Moreover, in section 10(2)(vib) the legislature used the word " new " before " machinery ", whereas in section 15C(2) the word " new " has not been used before the word " machinery ". The main ground on which the Tribunal proceeded was that as the substantial part of the machinery is new, it is immaterial whether 20 per cent. of the machinery is old. According to the Tribunal for all intents and purposes the entire machinery should be treated as new. We see no fundamental fallacy in this approach. Such a contention did find favour with the Madras High Court in Commissioner of Income-tax v. Fenner Cockill Ltd. Mr. Awasthy contends that the basis of percentage is not the basis that can be taken into account under th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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