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Commissioner of Income-tax Vs. Warner Hindustan Ltd. - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtAndhra Pradesh High Court
Decided On
Case NumberR.C. No. 247 of 1978
Judge
Reported in[1987]165ITR403(AP)
ActsIncome Tax Act, 1961 - Sections 80J
AppellantCommissioner of Income-tax
RespondentWarner Hindustan Ltd.
Appellant AdvocateM. Suryanarayana Murthy, Adv.
Respondent AdvocateM.J. Swamy, Adv.
Excerpt:
.....court held that deduction under section 80j is permissible regardless of consideration whether new industrial undertaking functions only for a part of year or for entire year. - motor vehicles act (59 of 1988)section 149 (2): [v. gopala gowda & jawad rahim, jj] insurers entitlement to defend the action joint appeal by insured and insurer - held, the language employed in enacting sub-section (2) of section 149 appears to be plain and simple and there is no ambiguity in it. it shows that when an insurer is impleaded and has been given notice of the case, it is entitled to defend the action only on grounds enumerated in sub-section (2) of section 149 of the act, and no other grounds are available to it. the insurer is not allowed to contest the claim of the injured or heirs of the..........an assessee is entitled to claim deduction under section 80j of the income-tax act when a new industrial undertaking did not function for the entire period of twelve months. in other words, the question is whether the deduction can be proportionately granted if the new industrial undertaking functioned only for a part of the year. we find that courts have uniformly taken the view that the deduction under section 80j of the income-tax act is permissible regardless of the consideration whether the new industrial undertaking functions only for a part of the year or for the entire year. once the new industrial undertaking functioned in any part of the accounting year relevant to the assessment year under consideration, then the assessee is entitled to claim the deduction fully. we may.....
Judgment:

Y.V. Anjaneyulu J.

1. The following two questions are referred to this court under section 256(1) of the Income-tax Act, 1961, for its opinion by the Income-tax Appellate Tribunal :

'1. Whether, on the acts and in the circumstances of the case, the appeal against the order of the Income-tax Officer giving effect to the directions given by the Appellate Assistant Commissioner is maintainable ?

2. Whether, on the facts and in the circumstances of the case, relief under section 80J of the Income-tax Act, 1961, could be given for the entire period of 12 months notwithstanding the fact that the unit in question worked for a part of the year only ?'

2. Learned counsel for the Revenue fairly conceded that the first question is covered by a decision in the assessee's case in CIT v. Warner Hindustan Ltd. : [1979]117ITR15(AP) in favour of the assessee. We accordingly answer the the question in the affirmative, i.e., in favour of the assessee and against the Department.

3. Regarding the second question, it may be mentioned that the dispute is whether an assessee is entitled to claim deduction under section 80J of the Income-tax Act when a new industrial undertaking did not function for the entire period of twelve months. In other words, the question is whether the deduction can be proportionately granted if the new industrial undertaking functioned only for a part of the year. We find that courts have uniformly taken the view that the deduction under section 80J of the Income-tax Act is permissible regardless of the consideration whether the new industrial undertaking functions only for a part of the year or for the entire year. Once the new industrial undertaking functioned in any part of the accounting year relevant to the assessment year under consideration, then the assessee is entitled to claim the deduction fully. We may refer to the decisions in CIT v. Simpson and Company : [1980]122ITR283(Mad) CIT v. Sanghi Beverages (Pvt.) Ltd. : [1982]134ITR623(MP) ,Addl. CIT v. Dr. K. P. Karanth : [1983]139ITR479(AP) (sic) and CIT v. Mysore Petro-Chemical Ltd. : [1984]145ITR416(KAR) , supporting above view. We are also informed that the Central Board of Direct Taxes has also since issued a circular bearing No. 378, dated March 3, 1984 (see : [1984]149ITR1(Delhi) ), affirming the above position as correct. In the above view, we answer the second question also in the affirmative, i.e., in favour of the assessee and against the Revenue. No costs.


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