Masud, J. - (1.) In this reference under Section 66(2) of the Indian Income-tax Act, 1922, the following question has been referred to this court: " Whether, on the facts found by the Tribunal or on record and in the circumstances of the case, the Tribunal was justified in holding that Section 15C of the Indian Income-tax Act, 1922, was applicable to the new production units added to the existing production units of the assessee at Belur, Alupuram and Muri in respect of buildings, plants and machineries and directing exemption to be granted under the aforesaid section accordingly ? "
(2.) The relevant assessment year is 1960-61, the corresponding previous year being the calendar year ended on December 31, 1959. The assessee-company is a manufacturer of aluminium ingots from ores. In the earlier years it had four manufacturing centres at Belur, Kalwa, Alupuram, and Hirakud. In the present accounting year one more was added at Muri and also there were additional extensions to the existing factories at Belur and Alupuram. In connection with the assessment year 1960-61 the assessee-company had claimed relief under Section 15C before the Income-tax Officer in respect of fresh capital outlay at Muri as well as additional investment in the form of extension to the existing factory premises, installation of new plants and machineries, etc., at Alupuram and Belur. The Income-tax Officer discussed the relief under Section 15C in respect of the unit at Hirakud but did not deal with the other three units in dispute. He has, however, refused to grant any relief to the assessee-company in respect of all the said four units. In the appeal before the Appellate Assistant Commissioner the company claimed relief under Section 15C in respect of only three units at Alupuram, Belur and Muri. On the basis of the records in the earlier years the Commissioner disallowed the relief under Section 1SC in respect of Alupuram and Belur units. With respect to the unit at Muri the Commissioner has found that the assessee has already a manufacturing unit at Muri which was only expanded in the accounting year. In the premises he confirmed the order of the Income-tax Officer. The assessee-company appealed before the Appellate Tribunal. After discussion of the submission made by the representatives for the parties the Tribunal came to the conclusion that all the said three units are new undertakings and, therefore, the company is entitled to relief under Section 15C. It may be stated here that the Tribunal came to the said conclusion on the reasonings set out by them in their earlier consolidated order in respect of Belur and Alupuram units for four assessment years 1956-57, 1957-58, 1958-59 and 1959-60. Another point was raised before the Tribunal in respect of the assessment year 1959-60 which related to the disallowance of a sum of Rs. 1,59,630 which is the wealth-tax paid by the assessee and claimed as a business expense. The Tribunal rejected the said claim. We are not concerned with this point in this reference.
(3.) Before I deal with the points argued by the counsel for the parties it is necessary to set out the relevant provisions of Section 15C which read as follows. " 15C. (1) Save as other wise hereinafter provided, the tax shall not be payable by an assessee on so much of the profits or gains derived from any industrial undertaking or hotel to which this section applies as do not exceed six per cent. per annum on the capital employed in the undertaking or hotel, computed in accordance with such rules as may be made in this behalf by the Central Board of Revenue. (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 ;..... Provided that the Central Government may, by notification in the Official Gazette, direct that the exemption conferred by this section shall not apply to any particular industrial undertaking.";