1990 (10) TMI 36

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....t formed by splitting up or reconstruction of a business already in existence or by transfer of machinery or plant previously used for any purposes within the meaning of section 80J of the Income-tax Act, 1961 ? 2. Whether, on the facts and in the circumstances of the case, the Tribunal was legally correct in holding that the manufacturing of catechu is a chemical process and that the Income-tax Officer was justified in allowing depreciation at 10% as against the normal rate of 7% ? 3. Whether, on the facts and in the circumstances of the case, the Tribunal was legally correct in quashing the order of the Commissioner of Income-tax passed under section 263 of the Income-tax Act, 1961 ?" The assessee is a registered firm. The assess....

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....cold drying chambers, automatic saw machines, evaporating pans, chipping machines, wooden vats, electric meters, electrical installations, etc., etc. All these items were installed in the assessment year 1966-67 in the new premises at Kotla Road." On the above factual findings, the Tribunal held that the assessee's undertaking is not formed by reconstruction of a business already in existence nor is it formed by the transfer of machinery or plant previously used for any purpose within the meaning of subsection (4) of section 80J. The Tribunal also found that the process employed by the assessee is a manufacturing process. So far as the second question is concerned, the Tribunal referred to the meaning of the expressions "catechine", "....

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....to chemistry; obtained by chemistry 1576. 4. Versed in chemistry 1615. 5. as sb. (esp. in pl) A substance obtained or used in chemical. operations 1747. 3. C. Affinity, attraction, etc. : see affinity, attraction, etc. The C. composition of plants Sir H. Davy of the atmosphere Huxley Chemically. adv.' This would indicate that the manufacturing of catechu is a chemical process and the Income-tax Officer rightly allowed depreciation on account of this." Thereupon, the Revenue applied for and obtained the present reference. So far as question No. 1 is concerned, we must state straightaway that there was material on record before the Tribunal justifying its finding. We have already referred to the finding of the Tribunal. A fresh piece....

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....al works". It reads as follows : ------------------------------------------------------------------------------------------------------------------------------------------------ Rate. Number on the basis of which the percentage is to be calculated " Class of asset on the written down value except Remarks where otherwise indicated in the case of ocean-going steamers. ------------------------------------------------------------------------------------------------------------------------------------------------ 1 2 3 ------------------------------------------------------------------------------------------------------------------------------------------------ (3) Chemical works: (a) Machinery and plant coming into....