- (1.) WE have heard learned Counsel for the Income Tax Department and the learned Counsel for the assessee.
(2.) THE following two questions have been referred: (1) Whether on the facts and in the circumstances of the case, the Appellate Tribunal was right in holding that the provisions of Section 80J(1) and 80J(3) will apply with respect to the deficiency of earlier years? (2) If the reply to the above question is in favour of the revenue, whether the Appellate Tribunal erred in holding that the benefits of Section 80J were at all available to the assessee? Section 80J was inserted in Act in place of old Section 84, which was deleted by Finance Act No. 2 of 1967. There is a circular letter F. No. 15.5.1963 -IT (A1) of the C.B.D.T. dated 13.12.1963 in which it has been clarified by the Board that the benefit of Section 84 (now Section 80J) of the Income Tax Act, 1961 attaches to the undertaking and not to the owner thereof. The Board has clarified that the successor (new owner) will be entitled to the benefit for the unexpired period of five years, provided the undertaking is taken over as a running concern.
(3.) IN the case in hand, there is not even transfer of ownership of the undertaking, but there is a mere change of the 'constitution of the firm', which apparently has been accepted by the department.;