9911796707
TMI Blog1975 (2) TMI 13X X X X Extracts X X X X X X X X Extracts X X X X ..... to fall within the scope of section 15C(2)(i) of the Indian Income-tax Act, 1922 ? " In this reference we are concerned with the assessment years 1957-58 to 1961-62. The relevant year ended on 31st October, preceding the relevant assessment years. The assessee was incorporated as a public limited company on June 12, 1945. In the same year it took on lease a factory situated at Hazra Road and started manufacturing switch boards, transformers, etc., and thereafter purchased the said factory in the year 1946 and continued to carry on business therein. In 1956 the assessee started a new factory at Cossipore by purchasing new machinery and plant of the value of over Rs. 6 lakhs and started manufacturing therein the same types of goods as wer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stence at the factory at Hazra Road, for the machinery at Hazra Road factory were used at Cossipore factory and the same types of goods were manufactured in that factory and, therefore, it was merely an expansion of the same business and hence the assessee was not entitled to the benefit of section 15C(1) of the Act. We are concerned with sub-sections (1) and (2)(i) of section 15C of the Act in this reference and these two sub-sections have already been considered by our court and the High Courts at Bombay, Madras and Delhi respectively in the cases of Commissioner of Income-tax v. Textile Machinery Corporation , Commissioner of Income-tax v. Indian Aluminium Co. Ltd. Commissioner of Income-tax v. Orient Paper Mills Ltd. Commissioner of I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relevant date for determining the question as to whether the new undertaking was " formed by the splitting up or the reconstruction of business already in existence or by the transfer to a new business of building, machinery or plant previously used in any other business " is the date of establishment of the new undertaking ; and the assessee will be entitled to the benefit of section 15C(1) of the Act if the value of the transferred machinery or plant of an existing business to a new industrial unit is " a small fraction of the total expenditure involved in the setting up of the new unit " . By applying those principles in the facts of the instant reference before us we are to see whether on the relevant date the factory at Cossipore wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ely overhauled and new buildings were constructed for housing that plant on the land which was acquired in 1934. The value of scrap and material of the old unit in the erection of the new plant was a small fraction of the expenditure involved in the setting up of the new plant. Both the old and the new factories were run simultaneously in the assessment year 1957-58 and one account was kept by the assessee and thereafter in the next assessment year the old factory was completely scrapped and only the new factory was run. On those facts it was held by the learned Chief Justice, Mr. Khanna (as he then was), that the new unit was a distinct and separate unit and it was not formed by the reconstruction of the business already in existence and t ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
