Dipak Kumar Sen, J. - (1.) The facts in the present proceedings which have been found or admitted are as follows :
(2.) N. Guru Investment Pvt. Ltd., Calcutta, the assessee, a private limited company, started to function in the assessment year 1966-67, the accounting year being the calendar year 1965. The assessee was incorporated in May, 1964, and had taken over an existing business on the 1st January, 1965. The said business consisted of manufacture of precision instruments and had been started in 1961. Under a deed dated the 2nd November, 1965, the business was taken over by the assessee with retrospective effect as from the 1st January, 1965.
(3.) In its assessment to income-tax the assessee claimed benefit under s, 84 of the I.T. Act, 1961, as it stood at that time, on the ground that it was a newly established industrial undertaking. The ITO found that the assessee had been formed by reconstruction of a business already in existence and that the previous proprietor of the business and his nominees held substantial shares in the assessee-company. The other shareholders of the assessee were also the creditors of the previous business. He, therefore, held tljat the assessee was not entitled to the benefits under the said Section 84.;