COMMISSIONER OF INCOME TAX Vs. TEXTILE MACHINERY CORPORATION
LAWS(CAL)-1970-7-18
HIGH COURT OF CALCUTTA
Decided on July 09,1970

COMMISSIONER OF INCOME-TAX Appellant
VERSUS
TEXTILE MACHINERY CORPORATION Respondents

JUDGEMENT

P.B.Mukharji, CJ. - (1.) This income-tax reference under Section 66(1) of the Indian Income-tax Act, 1922, refers the three following questions for determination by the court. The questions are : "(1) 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 Indian Income-tax Act, 1922, applied? (2) 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 industrial undertaking to which Section 15C of the Indian Income-tax Act, 1922, applied? (3) Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the claim for deduction of wealth-tax paid during the accounting year was admissible in computing the assessee's profits from its business ?"
(2.) We can straightaway dispose of the third question as we find it is already covered by the decision in Travancore Titanium Products Ltd. v. Commissioner of Income-tax, where the Supreme Court held that the amount of wealth-tax paid by an assessee on his net wealth under the Wealth-tax Act, 1957, was not a permissible deduction under Section 10(2)(xv) of the Indian Income-tax Act, 1922. Following the decision we answer the third question in the negative and in favour of the revenue.
(3.) We are, therefore, left with the first two questions. The Central controversy in these two questions is, about the meaning to be given to the expression "industrial undertaking'' in Section 15C of the Indian Income-tax Act, 1922, and, in particular, the meaning to be given to the words "reconstruction of business already in existence" in Section 15C (2)(i) of the Income-tax Act, 1922. To appreciate the controversy and its different aspects it will be necessary to set out the relevant facts.;


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