9911796707
TMI Blog1984 (10) TMI 122X X X X Extracts X X X X X X X X Extracts X X X X ..... of the assessee-company before the ITO was that its liabilities should not be deducted from the value of the assets employed by it in the new industrial undertaking for the purpose of computing its capital under s. 80J of the IT Act, 1961. In view of the provisions of s. 80J, as retrospectively amended by the Finance (No. 2) Act, 1980, the ITO rejected the contention of the assessee. On appeal, the CIT (Appeals) confirmed the order of the ITO. Aggrieved by this order of the CIT (Appeals), the assessee came up in appeal before the Tribunal. 3. After hearing the parties, the ld. Judicial Member was of the view that the order of the CIT (Appeals) was in consonance with the provisions of s. 80J, as retrospectively amended by the Finance (No. 2) Act, 1980 and so the appeal of the assessee deserved to be dismissed. He rejected the prayer of the assessee to the effect that since the validity of the retrospective amendment of s. 80J had been challenged in the Supreme Court, the case should be restored to the file of the ITO for redeciding the same after the decision of the Supreme Court. In his opinion, the law as it stood at present applied to the case and there was no justification to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er relied upon the decision of the Gujarat High Court in the case of CIT vs. Surat District Co-operative Milk Producers Union Ltd., Surat, in Income tax Application NO. 81 of 1982. In the last mentioned case, the procedure adopted by the Tribunal in remitting the matter back to the CIT (Appeals) with a direction to redecide the case after the decision of the Supreme Court on the vires of the retrospective amendment, was approved by the High Court. 7. There is no good reason to depart from the majority view of the Tribunal in the aforesaid cases of Secals Ltd vs. Third ITO and Simco Meters Ltd. vs. IAC. It has been held by the Madras High Court in CIT vs. L.G. Ramamurthi & Ors. 1977 CTR (Mad) 416 : (1977) 110 ITR 453 (Mad) and CIT vs. S. Devaraj (1969) 73 ITR 1 (Mad), that when the Tribunal takes a particular view on a particular issue, it should not subsequently contradict itself by taking a diametrically opposite view on the same issue. In view of these authorities of the Madras High Court, I would, for the sake of consistency, follow the majority decision of the Tribunal in the cases of Secals Ltd. vs. Third ITO and Simco Meters Ltd. vs. IAC, which in evolved the same issue. 8. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 980. 3. The assessee being aggrieved and dissatisfied with the impugned order on the issue has preferred this appeal. Shri N. Devanathan, Counsel for the assessee, relying upon the grounds of appeal contends that s. 80J relief is to be given to the assessee as claimed. He further contends that the s. 80J relief is to be computed on the capital employed including the borrowings. Reliance was placed on the decision in the capital employed including the borrowing. Reliance was placed on the decision in the case of Madras Industrial Lining vs. ITO 1978 CTR (Mad) 45 : (1977) 110 ITR 256 (Mad) contends that the Hon'ble Madras High Court's decision is not applicable to the facts of the case on the amended section was not there before their Lordships of the Madras High Court in deciding the aforesaid case. Further more, the decision of the Hon'ble High Court in case of CIT vs. Toshiba Anand Lamps Ltd. (1983) 34 CTR (Ker) 341 : (1984) 145 ITR 563 (Ker) Traco Cable Co. Ltd vs. CIT (1982). 28 CTR (Ker) 307 : (1982) 138 ITR 385 (Ker) and CIT vs. K.N. Oil Industries (1982) 26 CTR (MP) 169 : (1982) 134 ITR 651 (MP) are there in favour of the Revenue. He further contends that the Tribunal has no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 80J of the Act. In the case of CIT vs. Toshiba Anand Lamps Ltd. (1983) 34 CTR (Ker) 341 : (1984) 145 ITR 563 (Ker), their Lordships of the Kerala High Court held on following its own decisions in Traco Cable Co. Ltd. vs. CIT (1982) 28 CTR (Ker) 307 : (1982) 138 ITR 385 (Ker) that in view of the amendment or s. 80J by the Finance (No.2) Act, 1980 with retrospective effect from April, 1972, amounts borrowed for capital will have to be deducted in determining the capital employed for the purpose of s. 80J of the IT Act, for the asst. yrs. 1972-73 and 1973-74. 5. In the case of CIT vs. K.N. Oil Industries the Madhya Pradesh High Court held as under: "After the amendment of s. 80J by the Finance (No. 2) Act, 1980, with retrospective effect from 1st April, 1972, borrowed Moines and debts owned by an assessee are to be excluded in computing the capital employed in an industrial undertaking for granting relief under the provision. Therefore, for the asst. yr. 1973-74 an assessee is not entitled to relief under s. 80J on the basis of gross capital without deducting the value of the borrowed capital employed in the undertaking." The view taken by the Benches of the Tribunal on the iss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court is available, which over is earlier. In coming to the above conclusion the Tribunal relied on the order of the Gujarat High Court in Income-tax Application No. 81 of 1982 in the case of CIT vs. Surat District Co-operative Milk Producers Union Ltd. Surat, in which the same procedure adopted by the concerned Bench of the Tribunal to remit the matter back to the Commissioner (A) with a direction to recompute the profit after the pronouncement of the decision of the Supreme Court on the vires of the retrospective amendment was approved by the Gujarat High Court, as being only with a view to save public time and cost. The Tribunal in its order also referred to CIT vs. K. N. Oil Industries (1982) 26 CTR (MP) 169 : (1982) 134 ITR 651 (MP) and (1982) 28 CTR (Ker) 307 : (1982) 138 ITR 385 (Ker) relied on by the Department, cited in the J.M.'s order and stressed that in these cases the specific question as posed before the Gujarat High Court was not raised. 2. It may also be stressed here that the issue before us relates only to a question of procedure and not of law. The Madras Benches of the Tribunal have generally been following the practice of restoring the matter regarding s. 80J ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
