OF INCOME TAX DELHI Vs. CEMENT DISTRIBUTORS LTD

JUDGEMENT

(1.) In this reference under Section 256(1) of the Income-tax Act, 1961(in short the Act), at the instance of the revenue, the following two questions have been referred for the opinion of this Court:-

(2.) At the outset we may state that the first question, as framed, can straight away be answered in the negative on the short ground that the question itself suggests and holds that "the assessee company did not derive any profit from manufacturing operations", which is a condition precedent for the deduction permissible under Section 80HH of the Act. Relief under Section 80J of the Act having been granted in consequence of the relief under Section 80HH. and also stated so in the question itself. the answer to second question will also go the same way. However, as the case has been argued at some length, we will also consider it so. for which it would be necessary to refer to tlie cts as found by the Tribunal and the relevant statutory provisions.

(3.) The respondent/assessee, a closely held company was engaged in various trading and manufacturing activities. On I April 1971 tlie assessee set up a new industrial undertaking at Dalmia Puram, a notified backward area situated in Tiruchirapalli District of Tamil Nadu under the name and style of Rockfort Asbestos for manufacturing asbestos cement pipes. For the assessment year 1975-76, with which we are concerned in the present reference and for which the accounting period ended on 31 October 1974, the assessee claimed deduction under Section 80HH of the Act, amounting to Rs.3,646.00 , being 20% of the profits derived from its unit Rockfort Asbestos. In respect of the same unit it also claimed deduction under Section 80J of the Act atRs.9.834.00 .