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TMI Blog1984 (2) TMI 132X X X X Extracts X X X X X X X X Extracts X X X X ..... essment year 1973-74 in which year the assessee came to employ the requisite number of persons although production had started in the assessment year 1971-72 in which year the assessee however had not employed requisite number of persons and erred further in directing the ITO to give deduction under section 80J in the assessment year 1976-77 which happened to be the sixth year from the initial assessment year in which production was started." 2. The relevant facts of the case are briefly as follows : The assessee, an electrical engineering company, had, for the assessment year 1976-77, claimed, inter alia, deduction under section 80J of the Income-tax Act, 1961 (' the Act ') in respect of its profits derived from a new industrial under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee's claim need not be considered. 3. The assessee challenged this decision of the ITO before the Commissioner (Appeals), who accepted the assessee's contention that the relief envisaged in section 80J cannot, altogether, be denied to the assessee only because conditions are not satisfied in the initial assessment years ; that as long as the conditions are satisfied for one or more of the subsequent years failing within five years, the relief under section 80J can be claimed by the assessee and allowed under the law. In support of this proposition, the Commissioner (Appeals) relied on the decision of the Gujarat High Court in CIT v. Satellite Engg. Ltd. [1978] 113 ITR 208 cited before him on behalf of the assessee. In his opinio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 80J which are intended for providing incentive to new industries should be construed in consonance with this avowed aim and object of the Legislature and not such as would defeat the same. It is on this thesis that the Gujarat High Court further held that if a new industrial undertaking which had not satisfied the conditions laid down in the relevant section in the year of its birth or commencement of business, it cannot be denied the benefit of the tax holiday under the said provision of the law for all time and that such benefit will be available to the assessee in and from the assessment year in which such conditions are satisfied. In view of this exposition of law by the Gujarat High Court, we hold that the present assessee was en ..... X X X X Extracts X X X X X X X X Extracts X X X X
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