PERIYAR CHEMICALS LIMITED Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) A claim regarding deduction under Section 80J of the Income-tax Act, 1961, for the concerned assessment years comes before us expecting an answer to the following question:

(2.) UNDOUBTEDLY, even on an impulsive blush, the question is purely relating to the factual matrix. The statutory provision of Section 80J speaks of deduction in respect of profits and gains from newly established industrial undertakings, in the context of the factual matrix. Profits and gains derived from an industrial undertaking are conditioned by the statutory provisions of the proviso thereto. It requires the said profits and gains in the context of an industrial undertaking, beginning to manufacture or produce articles or to operate its cold storage plant or plants after March 31, 1976. The deductions specified in sub-section (1) thereof, in accordance with the provisions of sub-section (2) thereof take us to the previous year with reference to which the industrial undertaking began to manufacture or produce articles. It would be seen from the statutory provision that there should be material on record with reference to the concerned industrial undertaking relating to the beginning of the manufacture or production of the article as specified in the said statutory provision and the relevant date is March 31, 1976. In other words, the statutory provision requires a new industrial undertaking with reference to the time specified in the said provision and it is only after satisfaction of the statutory provisions that deduction can be considered in accordance therewith.

(3.) IN support of the said contention, the assessee claimed that this was a new unit housed in a building adjoining the old plant and thus was a severable separate unit having separate autoclaves, converters, distillers, etc. It is contended that all these resulted in a substantial increase in the production capacity.