TMI Blog1995 (7) TMI 14X X X X Extracts X X X X X X X X Extracts X X X X ..... 56(1) of the Income-tax Act, 1961. In R. C. No. 118 of 1987, the following question is referred to this court : "Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal is right in directing the grant of relief under section 80J even though no separate set of accounts were maintained ?" In R. C. No. 35. of 1988 the following two questions are referred to this court : " (1) Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was right in directing the grant of relief under section 80J even though no separate set of accounts were maintained and profits of the new unit could not be clearly determined ? (2) Whether, on the facts and in the circumstances o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 118 of 1987 which is the first. question in R. C. No. 35 of 1988 was referred to us. So fair as the second question is concerned it was pointed out that during the accounting year relevant for the assessment year 1980-81, the employees were less than the minimum stipulated as such, the allowance could not be granted. We shall first dispose of the second question. It is not disputed that the fall in the strength of the staff was not during the normal period, but owing to the closure of the mill during the relevant period. As this was an abnormal situation the strength of the staff cannot be taken as a criterion for denying the relief in such a situation where an undertaking remains closed or could not work either due to closure or strike o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relief. As the company did not maintain separate accounts for the new unit, the Income-tax Officer worked out the capital employed on the profit-sharing ratio. This view was not shared by the appellate authority who held that the assessee was entitled to the relief as claimed and directed the Income-tax Officer to examine the computation and allow the relief. On appeal by the Revenue the Tribunal confirmed the view of the Commissioner (Appeals). On a reference to the High Court it was held by the Calcutta High Court that once the conditions mentioned in section 84 of the Act were found to have been fulfilled what remained was the question of working out the percentage at six per cent. per annum for purposes of computation of capital, rejec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant was integrally connected with the three other plants which were already in existence and recorded a finding that the plant in question and the other plants formed part and parcel of the same undertaking. It recorded a further finding that it was not possible to find out from the accounts, as to what profits were derived by the assessee from the new unit and it was on those facts the Tribunal held that the assessee was not entitled to the relief under section 80J. On a reference the High Court observed that having regard to the findings recorded by the Tribunal the only inference possible was that the new plant was formed by reconstruction of an existing business and that it was not possible to work out the profits and gains derived from ..... X X X X Extracts X X X X X X X X Extracts X X X X
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