1979 (1) TMI 65

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....ion from income-tax under s. 15C of the Indian I.T. Act, 1922. The ITO rejected this claim on the ground that the new industrial undertaking was formed by transfer to the new business of buildings which were used in any other business. In appeal the order of the ITO was set aside by the AAC and, therefore, the revenue challenged the order of the AAC before the Income-tax Appellate Tribunal. The Tribunal took the view that two requirements had to be satisfied before an assessee could claim partial exemption under s. 15C of the Act. The first requirement, according to the Tribunal, was that the building used by the assessee had to be shown to have been previously used by the assessee himself. The other requirement, according to the Tribuna....

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....ion of this court in Capsulation Services Pvt. Ltd. v. CIT [1973] 91 ITR 566 (Bom). In order to avail of the exemption provided for under s. 15C(1), one of the conditions which has to be satisfied is the one prescribed in cl. (i) of sub-s. (2) of s. 15C which refers to the industrial undertaking to which s. 15C applies and the relevant part thereof reads as follows : " (2) This section applies to any industrial undertaking which- (i) is not formed by the splitting up, or the reconstruction of, business already in existence or by the transfer to a new business of building, machinery or plant previously used in any other business." We are not concerned with the first part of clause (i) in this case. The Tribunal has taken the view th....

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....avour of the new business or the person carrying on the new business. In view of this authoritative pronouncement of this court, it must be held that the view taken by the Tribunal that the transfer of the building must be of the building used by the assessee and that the lease was not covered by the word " transfer " was clearly erroneous in law. Mr, Mehta appearing on behalf of the assessee, however, contended that having regard to the fact that the interest transferred in the form of a lease was so insignificant as compared with the other assets of the company that the assessee could not be deprived of the benefit of the provisions of s. 15C(1) of the Indian I.T. Act, 1922. Obviously this contention is founded on the view taken in ....