TMI Blog1992 (11) TMI 18X X X X Extracts X X X X X X X X Extracts X X X X ..... e plea, which is dealt with in paragraph 13 of the Tribunal's order ?" The concerned assessment years are 1964-65, 1965-66 and 1966-67. The relevant previous years are the years ending on March 31, 1964 and 1965. The assessee is a limited company incorporated under the provisions of the Companies Act. The assessee was carrying on the business of manufacturing hard-boards and insulation boards. The assessee set up its hard-board factory first and the insulation board factory was set up subsequently. There is no dispute between the parties that the two units manufacturing hard-boards and insulation boards were to be treated as two separate industrial undertakings for the purpose of claiming relief envisaged under section 84 of the Act (wrongly referred to as section 80J, throughout the statement of case). The hard-board unit started operation in the assessment year 1959-60 and earned profits from the very commencement. Relief/deduction under section 84 of the Act and under the corresponding section 15C of the Indian Income-tax Act, 1922, was avail able for a period of five years. The hard-board unit was granted relief under section 15C of the 1922 Act for the assessment year 1959 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 961-62 40.11 lakhs 1962-63 27.96 lakhs 1963-64 24.40 lakhs 1964-65 24.48 lakhs 1965-66 29.16 lakhs 1966-67 36.29 lakhs The figures of share capital, reserves and surplus and of the advances made by the hard-board unit to the insulation unit as appearing in the books of account of the hard-board unit for the assessment years 1964-65, 1965-66 and 1966-67 were as under : ------------------------------------------------------------------------------------------------------------------------------------------------ Assessment Share Reserves and Year end balance of capital surplus advance to insulation unit ------------------------------------------------------------------------------------------------------------------------------------------------ Rs. Rs. Rs. 1964-65 59.90 lakhs 29.18 lakhs 24.48 lakhs 1965-66 72.00 lakhs 34.02 lakhs 29.16 lakhs 1966-67 72.00 lakhs 37.67 lakhs 36.29 lakhs ------------------------------------------------------------------------------------------------------------------------------------------------ While claiming relief under section 84 of the Act in the assessments for the assessment years 1962-63 and 1963-64, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... calculated, he granted relief as permissible under section 84 of the Act. The assessee, being aggrieved, appealed against the assessment orders. The Appellate Assistant Commissioner gave partial relief by taking the view that since both units belong to the assessee and the share capital of the assessee-company was employed in both the units, the capital should be allocated to each unit in the ratio of the fixed assets of each division. With regard to reserves, he thought that such apportionment was not necessary because the reserves pertaining to each unit were separately shown in the books of account of the concerned unit. By granting such partial relief, the Appellate Assistant Commissioner reduced the deduction for debts and liabilities to Rs. 3.10 lakhs, Rs. 7.28 lakhs and Rs. 13.02 lakhs for the assessment years 1964-65, 1965-66 and 1966-67, respectively. On further appeal to the Income-tax Appellate Tribunal, the Tribunal took the view that from a careful reading of the balance-sheet and profit and loss accounts of the company, in conjunction with the figures for the two units which were separately available, it could be seen that the assessee was entitled to succeed as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plea of estoppel raised by the Revenue. The assessee was claiming a specific relief of deduction provided under section 84 of the Act. Prima facie, therefore, the burden lay on the assessee to produce cogent material in support of its claim. The facts before the Tribunal showed, that during the assessment proceedings pertaining to the assessment years 1962-63 and 1963-64, the assessee had taken a categorical stand that the amounts shown in the books of account of the hard-board unit as due and payable by the insulation board unit ought not to be deducted while computing the capital employed in the hard-board unit for the purpose of relief under section 84 of the Act for the reason that these advances really represented monies borrowed from outsiders for the benefit of the insulation board unit and invested therein straightaway. This plea and stand was accepted by the Income-tax Officer and, accordingly, the assessee got the benefit of a larger relief without deducting these amounts while calculating the capital invested in the hard-board unit for the purpose of granting relief under section 84 of the Act. In the absence of any other material placed before the authorities or the Tri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... its that it is not permissible to treat them as loans from other parties and/or to deduct the said amounts for the purpose of calculating the capital for relief under section 84 of the Act. In our view, the position is the other way round. The facts contained in the statement of case along with its annexures only show that the figure of advances has reduced from the original figure of Rs. 40.11 lakhs to the smaller figure indicated during the relevant years. Coupled with the fact that, at least in the two assessment years 1962-63 and 1963-64, the assessee had claimed that these loans were obtained from outside parties and utilised for the business of the insulation board unit, if at all the assessee desired to get the benefit of the relief under section 84 of the Act, he should have placed material from which the changed character of these advances during the subsequent years could have been discerned. In the absence of such material being placed on record, we are of the view that the Income-tax Officer was justified in treating these advances as bearing the same character as in the assessment years 1962-63 and 1963-64. Consequently, the Income-tax Officer was justified in deductin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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