TMI Blog2004 (8) TMI 8X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessment 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Income-tax Act, 1961, hereinafter referred to as "the Act" for opinion to this court: "1. Whether, on the facts and in the circumstances of the case, the Tribunal was legally justified in setting aside the order of the Commissioner of Income-tax passed under section 263 of the Income-tax Act? 2. Whether, on the facts and in the circumstances of the case, the Tribunal was correct in holdin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee-firm set aside the assessment and directed the Income-tax Officer to recompute the allowance under section 80J of the Act. The assessee preferred an appeal against the said order of the Commissioner of Income-tax, Lucknow. In disposing of this appeal, the Tribunal observed as follows: "... the amendments in the relevant provision of the section were made by the Finance (No. 2) Act, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Nobody has put in appearance on behalf of the respondent-assessee. Learned counsel for the Revenue submitted that as an amendment was made under section 80J of the Act by the Finance (No. 2) Act, 1980, which came into force from August 21, 1980, but was retrospective in operation, the order of the assessing authority ought to have excluded the borrowed capital for working out the capital emplo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 the Commissioner of Income-tax was justified in setting aside the order of the assessing authority in exercise of jurisdiction ..... X X X X Extracts X X X X X X X X Extracts X X X X
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