Section 80J deduction barred where transferred machinery and a new business brought the case within the statutory exclusion.

Section 80J deduction was denied where the Tribunal found, as a matter of fact, that the assessee carried on a new business and that machinery from Shri Vinod Sonpar's individual business had been transferred to the firm. On those factual findings, section 80J(4)(ii) applied and barred the claim for deduction under section 80J for the relevant assessment year 1975-76. The question was answered in favour of the Revenue and against the assessee.

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Issues: Whether the assessee-firm was entitled to deduction under section 80J of the Income-tax Act, 1961, or whether the claim was barred by section 80J(4)(ii) on the finding that the business was a new business and machinery from the predecessor's individual business had been transferred to the firm.

Analysis: The relevant assessment year was 1975-76. The Tribunal's findings that the assessee carried on a new business and that machinery belonging to the individual business of Shri Vinod Sonpar had been transferred to the firm were findings of fact. On those findings, section 80J(4)(ii) was attracted, and the assessee could not claim the deduction under section 80J.

Conclusion: The question was answered in the affirmative, against the assessee and in favour of the Revenue.

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