TaxTMI 
TaxTMI 
1971 (11) TMI 11
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....me-tax Act, 1961, the following question : " Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the assessee was not entitled to relief under section 84 of the Income-tax Act, 1961 ? " The assessee is a public limited company owning tea and coffee plantations in Wynad District. During the previous year ending March 31, 1964, relevant to the assessment year 1964-65, the assessee claimed rebate under section 84(1) of the Income-tax Act, 1961, on a sum of Rs. 48,044 being the profits from the manufacture of tea in his newly established factory in Elstone division. The plea of the assessee is that it was, therefore, eligible for rebate on the profits from the tea manufactured in that new fac....
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.... otherwise hereinafter provided, income-tax shall not be payable by an assessee on so much of the profits and gains derived from any industrial undertaking or business of a hotel or from any ship, to which this section applies, as does not exceed six per cent. per annum on the capital employed in such undertaking or business or ship, computed in the prescribed manner. (2) This section applies to any industrial undertaking which fulfils all the following conditions, namely : (i) it is not formed by the splitting up, or the reconstruction, of a business already inexistence ; (ii) it is not formed by the transfer to a new business of a building, machinery or plant previously used for any purpose ; (iii) it manufactures or produces ....
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....ances of this case, the establishment of a new factory at Elstone division cannot, be considered to be a new industrial undertaking within the meaning of section 84(1) of the Income-tax Act, 1961. Prior to the accounting year ending with 31st March, 1964 the assessee was having the factory for the manufacture of tea only in the Chembra Peak division. During the previous year ending with 31st March, 1964, the assessee established a new factory in Elstone division employing a new process known as C.T.C. process (crushing, tearing and curling) to manufacture a new type of tea. Before the establishment of the factory in the Elstone division all the tea leaves from the tea estates in Elstone division were being taken to the factory in the Chembr....
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....l undertaking. It was ruled in Commissioner of Income-tax v. Standard Motor Products of India Ltd. a case dealing with section 15C of the Indian Income-tax Act, 1922, that the exemption under the said provision will have to be strictly construed. The marginal note or title of section 84(1) reads: "Income of newly established industrial undertakings or hotels." The words "newly established" are not in the section, but in our view, that cannot in any way affect the interpretation to be placed on the said provision. Counsel for the revenue relying upon Commissioner of Income-tax v. Textile Machinery Corporation , contended that to attract section 84(1) the newly established industrial undertaking should be for a purpose different a....