and for that purpose the assessee was purchasing the spare parts, forgings and castings from outside.
The grant of a special licence for the steel foundry division did number make it an industrial undertaking to qualify for exemption from tax under section 15C, because the licence was for expansion of the existing industrial undertaking and the licence did number companyer the jute mill division.
1 48 I.T.R. 123.
In respect of the Jute Mill Division, the Incometax Officer found that out of the total sales of Rs.13,03,509/ sales.
From the Judgment and Order dated 9th/10th July, 1970 of the Calcutta High Court in I.T.R. No.
Again, similarly in the year 1959 60, in addition to the manufacturing of castings in the Steel Foundry Division the assessee started the Jute Mill Division where the parts made out of the raw material supplied by the Boiler Division by machining and forging them were given to the Boiler Division of the assessee.
The above companyclusion was reached on the basis of several facts found by the Tribunal.
The assessee had previously in the earlier years bought from outside the castings manufactured in the Steel Foundry Division which was started in the assessment year 1958 59 and companytinued thereafter.
Separate housing of, and separate accounts for, the steel foundry division and jute mill division may be only parts of reconstruction of the same business and did number necessarily indicate a new indus trial undertaking.
to the Boiler Division totalled Rs.11,89,812/ and sales to outside the Jute Mill Division totalled only a sum of Rs.1,13,6971/ .
The Income tax Officer and the Appellate Assistant Commissioner, on the above facts, held the under takings as expansion and reconstruction of the business already existing and hence the assessee was number entitled 1 80 I.T.R. 428.
to exemption under section 15C of the Act.
772 773 of 1972.
These arc that the machinery was new, was housed in a separate building and that industrial licences had to be obtained, for manufactur ing the parts in question.
The Income tax Appellate Tribunal, however, allowed the appeal of the assessee and accepted the claim for exemption under section 15C. According to the Tribunal both the Steel Foundry and the Jute Mill Division of the assessee were new industrial undertakings.
P. Raman, Addl.
General, T.A. Ramachandran and N. Sachthey for the Respondents.
CIVIL APPELLATE JURISDICTION Civil Appeal Nos.
The matter came u13 before the High Court on a refer ence under section 66 1 of the Act.
Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the Jute Mill Division set up by the assessee company was an indus trial undertaking to which section 15C of the Indian Incometax Act, 1922, applied ?
Indian Income tax Act, 1922, applied ?
A. Palkhivala, Dr. D. Pal, U.K. Khaitan, S.R. Agar wal and Parveen Kumar for the Appellant.
The facts may briefly be stated The assessee the appellant herein is a heavy engineer ing companycern manufacturing boilers, machinery parts, wagons, etc.
For the assessment years 1958 59 and 1959 60 the assessee claimed exemption of tax under section 15C of the Act in respect of the profits and gains derived from its Steel Foundry Division and a similar claim for relief under section 15C in respect of its profits and gains derived from its Jute Mill Division for the year 1959 60.
The two questions referred to were as follows Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the Steel Foundry Division was an industrial undertaking to which section 15C of the.
The two appeals relate respectively to two assessment years 1958 59 calendar year 1957 and 1959 60 calendar year 1958 .
The Judgment of the Court was delivered by GOSWAMI, J. These two appeals by certificate are from the judgment of the Calcutta High Court since reported in Commissioner Income tax, West Bengal I v. Textile Machinery Corporation .
The matter relates to the claim by the assessee for exemption of tax under section 15C of the Indian Income tax Act, 1922 briefly the Act .
158 of 1966.
It was found that out of a total sale of Rs.28,23,127/ of steel castings goods worth Rs.18,39,433/ were used in companynection with the various Divisions of the companypany.
