Section 84 — the law in short
What the courts have decided on section 84, in one screen. Read this first; open an entry when you need the facts, the reasoning and the source.
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Bajaj Tempo Ltd v CIT
Supreme CourtHelps taxpayer
My new industrial undertaking runs from a leased building that was used for business before, and it took over a few old tools. Does that cost me the incentive deduction?
No, not on these facts. The Supreme Court held that a provision granting an incentive to promote growth must be construed liberally, and so must the restriction on it, so as to advance the object rather than frustrate it. The disqualifying words are not formed by the transfer of a building, plant or machinery previously used in another business: the emphasis is on formation, not on use. Only a transfer without which the new undertaking could not have come into being takes it out of the section. A leased factory building and tools worth Rs 3,500 did not play a dominant part in forming this company.
Listed strongest first: Supreme Court, then High Court, then Tribunal, then CBDT. Nothing here has yet been read in full by a chartered accountant — open an entry to see where it came from.