INCREASE IN CAPACITY FOR PRODUCTION OR OPERATION.

SEC. 520. INCREASE IN CAPACITY FOR PRODUCTION OR OPERATION. Section 444 (f) (relating to increase in capacity for production or operation) is hereby amended to read as follows: “(f) Rules for Application of Section.— “(1) The benefits of this section shall not be allowed unless the taxpayer makes application therefor in accordance with section 447 (e). “(2) If, during its first taxable year ending after June 30, 1950, the taxpayer completed construction of (including the installation of the machinery or equipment for use in) a factory building or other manufacturing establishment, such factory building or other manufacturing establishment and such machinery or equipment shall, for the purpose of determining whether there is an increase in capacity under the provisions of subsection (b), be considered to have been added to its total facilities on the last day of its base period if— “(A) the taxpayer, prior to the end of its base period, had completed construction work representing more than 40 per centum of the total cost of construction of such factory building or other manufacturing establishment, and “(B) the completion of such factory building or other manufacturing establishment was in pursuance of a plan to which the taxpayer was committed prior to the end of its base period. This paragraph shall not apply in determining the amount of the taxpayer’s total assets for the purpose of subsection (c).”