Section 80J deduction for industrial undertakings is available for the full year, not just a pro rata period

Section 80J relief for an industrial undertaking was to be computed for the full assessment year, even if the unit worked only for part of that year, rather than being restricted to a pro rata basis. The settled position applied by the High Court favoured the assessee on the period for which the deduction could be worked out. Actual computation still depended on the profits attributable to the unit and any question of carry forward, where relevant.

---

---

Issues: Whether, for the assessment year 1973-74, relief under section 80J of the Income-tax Act, 1961 was allowable for the full year or only on a pro rata basis for the period during which the industrial undertaking was working.

Analysis: The question referred was confined to the period for which the relief under section 80J could be worked out. In view of the settled position that the deduction is admissible for the whole year even where the industrial undertaking functioned for only part of the year, the controversy was answered in favour of the assessee. Any actual computation of the relief would still depend upon the profit attributable to the unit and the question of carry forward, if any.

Conclusion: Relief under section 80J was held to be allowable for the full year and not restricted to a pro rata basis. The answer was in favour of the assessee and against the Revenue.

---