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2004 (8) TMI 8 - HC - Income Tax"1. Whether Tribunal was legally justified in setting aside the order of the Commissioner of Income-tax passed under section 263? 2. Whether Tribunal was correct in holding that since the event of retrospective amendment made in section 80J had occurred after the framing of the assessment on February 13, 1980, the Commissioner of Income-tax could not validly assume jurisdiction under section 263?" - It is not in dispute that after the retrospective amendment the provisions of the statute exclude the borrowed capital from being taken into consideration for working out the capital employed under section 80J of the Act. As a result of the retrospective amendment made in the aforesaid section the position under law would be that during the assessment year in question borrowed capital had to necessarily be excluded and the same has not to be taken into consideration while working out the capital employed. The order is therefore erroneous and prejudicial to the interests of the Revenue. Thus CIT was justified in setting aside the order of the assessing authority in exercise of jurisdiction under section 263 - In view of the foregoing discussion we answer both the questions of law referred to us in the negative, i.e., in favour of the Revenue and against the assessee
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