COMMISSIONER OF INCOME TAX Vs. HIND LAMPS LIMITED

JUDGEMENT

(1.) The controversy involved in the question referred to us is as to whether, on the basis of the profit and loss account submitted by the assessee, the total income of the new unit could be computed for the purpose of deduction under Section 80J of the Income-tax Act. The question referred is quoted below :

(2.) The assessee dealt with production of lamps and for that purpose initially imported lamp caps. Later on, the assessee started manufacturing lamp caps itself for which a new unit was established. In the assessment year 1970-71, the assessee claimed relief under Section 80J of the Act before the Income-tax Officer but that was rejected on the ground that the manufacture of lamp caps was part and parcel of the assessee's existing business of manufacturing lamps and Section 80J was inapplicable. An appeal was filed before the Appellate Assistant Commissioner for the assessment year 1970-71 who also held that the new unit was nothing but a part and parcel of the assessee's existing business. The Appellate Tribunal, however, found that the assessee had established a new industrial undertaking and was entitled to relief under Section 80J. The matter then came up before this court, the reference being CIT v. Hind Lamps Ltd. [1980] 122 ITR 451. The learned judges, after considering the pronouncement of the Supreme Court in Textile Machinery Corporation Ltd. v. CIT [1977] 107 ITR 195, held that the Tribunal was correct in holding that the assessee had established a new unit and was entitled to the relief under Section 80J.

(3.) In the present case, the dispute relates to the assessment year 1972-73. Learned counsel for the assessee urged that even though no separate profit and loss account and balance-sheet of its new unit of manufacturing lamp caps was submitted before the authorities, the same was prepared by the assessee and it is incorrect that the same were not made available to the Income-tax Officer for working out the amount of deduction. It was further alleged that the submission of separate profit and loss accounts of the new unit was not necessary for working out the deduction under Section 80J of the Income-tax Act.