GLASS FIBRE TEXTILES Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THE Income-tax Appellate Tribunal, Indore Bench, Indore, has referred the following question to this court for its opinion under Section 256(1) of the Income-tax Act, 1961, hereinafter referred to as "the Act" :

(2.) THE matter related to the assessment year 1975-76. THE assessee is a registered firm deriving income from manufacture of fibreglass which was supplied to the Bharat Heavy Electricals Ltd., Bhopal. For the assessment year in question, the assessee claimed deduction of a certain amount under Section 80J of the Act. A similar deduction had been claimed in the assessment year 1974-75 also. It was disallowed by the Tribunal on the finding that Shri Vinod Sonpar, who was doing business earlier in his individual capacity, had subsequently transferred machinery to the assessee-firm and since the assessee-firm was a new business, the provisions of Section 80J(4)(ii) of the Act were attracted and the benefit of Section 80J consequently could not be claimed by the assessee. Relying on its finding given in the order relating to the assessment year 1974-75, the Tribunal disallowed the claim of the assessee in the relevant assessment year 1975-76 also. However, at the instance of the assessee, the Tribunal has referred the aforesaid question to this court for its opinion.