COMMISSIONER OF INCOME TAX Vs. FENNER COCKILL LIMITED

JUDGEMENT

(1.) THE short question in this reference is, whether reconditioned machinery, which has been imported from abroad, is within the ambit of Section 15C(2)(i) of the Indian Income-tax Act, 1922. We are of opinion that it is. THE reference relates to the assessment year 1961-62. THE assessee, a registered limited liability company, was primarily engaged in the manufacture of certain types of V Belts and other rubber goods used in the textile industry. During the previous year ended March 31, 1961, it started the manufacture of some other industrial rubber goods, such as synthetic rubber coats, aprons, etc., under a separate industrial licence granted to it by the Government. THE new unit was run in the name of "Resilla division". Separate trading and profit and loss accounts were prepared for these two items of business. THE assessee purchased machineries worth Rs. 2,36,885 from an overseas company, which were admittedly second-hand but reconditioned. THE assessee incurred an expenditure of Rs. 7,511 as erection charges. THE Appellate Assistant Commissioner, who disagreed with the Income-tax Officer, allowed exemption under Section 15C and the Commissioner failed before the Tribunal, THE question we are asked to consider at his instance is :

(2.) THE view of the Appellate Assistant Commissioner was that, though the machinery was second-hand, it was reconditioned and it was, therefore, as much new as any other machinery. He also considered that the plant and machinery were substantially renovated and there was no transfer of any machinery or plant previously used in this country. THE Tribunal, we think, rightly sustained that view.