1984 (11) TMI 30

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.... itself started manufacturing yarn from the wool tops. The facts noticed by the Tribunal are that in the year 1964-65, approximately Rs. 3 lakhs worth of machinery was purchased and in subsequent periods, additions were made and some machinery was also discarded. In the accounting period relevant to the assessment year 1968-69, machinery worth about Rs. 8 lakhs had been installed in connection with the spinning unit. The question which arose before the income-tax authority was whether relief under section 80J of the Income-tax Act had to be allowed to the assessee. The Income-tax Officer at various stages disallowed relief, but in the assessment year 1968-69, the Tribunal eventually held that relief was to be granted. That view was also ....

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....e period of thirty-three years next following the 1st day of April, 1948, or such further period as the Central Government may, by notification in the Official Gazette, specify with reference to any particular industrial undertaking; (iv) in a case where the industrial undertaking manufactures or produces articles, the undertaking employs ten or more workers in a manufacturing process carried on with the aid of power, or employs twenty or more workers in a manufacturing process carried on without the aid of power." The only part of this provision that requires to be applied to the facts of the present case is whether the spinning unit has been set up by reconstruction of a business already in existence. There is a judgment of the Delh....

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....ot before us. The finding of the Tribunal for both the years 1968-69 and 1969-70 is that the two units are separate and the spinning unit is a new industrial undertaking within the meaning of section 80J. Even otherwise, there being nothing to indicate that the old unit had been reconstructed, we would have thought that spinning unit to manufacture wool yarn out of wool tops is a unit different from a unit which manufactures wool tops out of raw wool or waste. In fact, the wool tops appear to have been used previously as raw material by other spinners for making yarn and instead of following that procedure, the assessee set up its own spinning unit in which it started making woollen yarn. The provisions of section 80J would, therefore, appl....