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TMI Blog1998 (3) TMI 89X X X X Extracts X X X X X X X X Extracts X X X X ..... o relief under section 80J of the Act in respect of its industrial undertaking in which plant and machinery previously used by a person other than the assessee had been installed ? 2. Whether, on the facts and circumstances of the case, the Tribunal was right in holding that the assessee is entitled to relief under section 80HH of the Act in respect of machinery and plant previously used in non-backward area The assessee is a partnership firm. The assessee's business consists of tannery and export of hides and skins. The assessee-firm was evidenced by a deed of partnership dated April 15, 1976, and it commenced its business activities on May 1, 1976. On account of death of one of the partners, a fresh partnership firm was constituted whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Act in respect of that unit and the Income-tax Officer held that the assessee was not entitled to claim deduction under section 80J of the Act, which was confirmed by the Appellate Assistant Commissioner. On further appeal before the Tribunal, it was contended on behalf of the assessee that for the purpose of considering the dispute even assuming that 100 per cent. plant and machinery used by the assessee was previously used by Srinivas and Co., the assessee would still be eligible for the relief under section 80J of the Act. The Appellate Tribunal, based on the decision of the Gujarat High Court in the case of CIT v. Suessin Textile Bearing Ltd. [1982] 135 ITR 443, held that the previous user contemplated under section 80J(4) of the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the assessee for any purpose and the fact that any third party had used the plant and machinery is not a relevant consideration to deny the relief under section 80J of the Act and that the assessee is entitled to the relief under section 80HH of the Act. Section 80J(4) of the Act provides that the relief under section 80J of the Act would be available to the industrial undertaking. Section 80J of the Act provides that one such condition for the grant of deduction is that the industrial undertaking should not have been formed by the transfer to a new business of machinery and plant previously used for any purpose. Section 80J(4) of the Act, therefore, postulates that the new unit is not formed by the transfer to a new business of machiner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the building by the assessee only. Therefore, it is clear that the assessee's claim that the machinery or plant was previously used by any third party and those machineries have been transferred to the new industrial undertaking with which the undertaking was formed is not tenable and the assessee is not entitled for the grant of the relief under section 80J of the Act. In so far as the deduction under section 80HH of the Act is concerned, the position is different as the proviso to section 80HH(2)(iii) of the Act prescribed a condition that there should not be a transfer to a new business of machinery or plant previously used for any purpose in any backward area. Therefore, the relief under section 80HH of the Act would be denied in -ca ..... X X X X Extracts X X X X X X X X Extracts X X X X
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