Section 80J deduction depends on meeting worker threshold conditions, and prior allowance does not preserve eligibility.

Deduction under section 80J is available only if the industrial undertaking satisfies the statutory conditions in section 80J(4), including the worker threshold in clause (iv). Where the undertaking used power, it had to employ ten or more workers, and where it did not, twenty or more workers. The condition was not met in the year under consideration, so the claim could not be sustained merely because relief had been allowed in the initial assessment year. The assessee was therefore not entitled to the deduction for the relevant year.

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Issues: Whether the assessee was entitled to deduction under section 80J of the Income-tax Act, 1961 for the relevant assessment year despite non-fulfilment of the statutory condition regarding the number of workers under section 80J(4)(iv), merely because the relief had been allowed in the initial assessment year.

Analysis: The deduction under section 80J is available only where the industrial undertaking satisfies the conditions prescribed in sub-section (4). Clause (iv) requires, in a case of manufacture or production with the aid of power, employment of ten or more workers, and without the aid of power, twenty or more workers. The court found that this condition was not fulfilled in the year under consideration, and the assessee's claim could not be sustained on the basis that relief had been allowed in an earlier year.

Conclusion: The assessee was not entitled to deduction under section 80J for the year in question; the question was answered in the negative and in favour of the Revenue.

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