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of <h1>Court affirms tax relief for new industrial unit under Income-tax Act</h1> <h3>Commissioner Of Income-Tax Versus Hindusthan Malleables And Forgings Limited</h3> The High Court upheld the Tribunal's decision that the assessee had established a new industrial unit eligible for relief under section 80J of the ... New Industrial Undertaking, Special Deduction Issues involved: The judgment involves the interpretation of whether the assessee had set up a new industrial unit eligible for relief u/s 80J of the Income-tax Act, 1961.Summary:Assessment Years 1977-78 and 1978-79:- The assessee, a limited company, claimed deduction u/s 80J for the assessment years in question, which was initially rejected by the Income-tax Officer.- The Commissioner of Income-tax (Appeals) allowed the deduction, which was further affirmed by the Tribunal.- The Tribunal found that the assessee had made substantial investments in modernization and expansion projects, installed new machinery, and increased production, establishing a new unit with a separate identity capable of producing specific products.Requisites for Deduction u/s 80J:- The Supreme Court's decision in Textile Machinery Corporation Ltd. v. CIT [1977] 107 ITR 195 laid down the requirements for entitlement to deduction u/s 80J, including substantial fresh capital investment, employment of labor, production of articles, earning profits attributable to the new unit, and a distinct identity of the industrial unit.- The Tribunal's findings aligned with these requisites, confirming the assessee's eligibility for benefits u/s 80J.Common Management and Books of Account:- The objection raised by the Revenue regarding common management, shared power sources, and common books of account was dismissed as insufficient to deny the deduction.- The Karnataka High Court and other High Courts have held that common management or shared accounts do not negate the separate identity of units for claiming relief u/s 80J.Conclusion:- The Tribunal's decision that the assessee had set up a new industrial unit eligible for relief u/s 80J was upheld by the High Court, answering the question in favor of the assessee.- The judgment was transmitted to the Assistant Registrar, Income-tax Appellate Tribunal, Patna Bench, without any costs awarded.
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