Legal Case Summary

Case Details
Case ID 5fa63787-baac-4f06-8061-60ce8256430c
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Decision The Tribunal justified granting relief under section 80J, as the necessary facts were established in favor of the assessee. The Income-tax Officer's initial denial was based on the absence of a separate factory building, which the AAC and Tribunal found exceeded the ITO's jurisdiction. It was determined that the new manufacturing unit met the conditions of section 80J(4) as the items produced were entirely new and distinct from previous offerings, new machinery was utilized, and fresh capital was deployed for the operation.
Summary This case revolves around the interpretation of section 80J of the Income-tax Act, 1961, which provides for deductions related to profits and gains from newly established industrial undertakings. The Karnataka High Court examined the claims of Metal Lamp Caps (P.) Ltd. regarding the manufacture of Goliath Screw Caps, a new product line distinct from their previous offerings. The court evaluated whether the Income-tax Officer's denial of benefits under section 80J was valid, given that the necessary conditions were met, including the verification of new machinery usage and fresh capital investment. The court ultimately ruled in favor of the petitioner, reinforcing the importance of adhering to statutory provisions while ensuring that the intent of tax relief for new industrial undertakings is honored. This case highlights the critical balance between regulatory compliance and the promotion of industrial growth in the economy.
Court Karnataka High Court
Entities Involved Metal Lamp Caps (P.) Ltd.
Judges K. Jagannatha Shetty, S.A. Hakeem
Lawyers K. Srinivasan, G. Sarangan
Petitioners Commissioner of Income Tax
Respondents Metal Lamp Caps (P.) Ltd.
Citations 1987 SLD 2797 = (1987) 163 ITR 822
Other Citations Not available
Laws Involved Income-tax Act, 1961
Sections 80J