2002 (9) TMI 77 - HC - Income Tax

Whether on the facts and in the circumstances of the case the value of stock-in-trade leased out by the assessee with Dharangdhara Chemical Works Ltd. and leased out dated November 26 1979 should be treated as part of the capital employed for the purpose of computing relief under section 80J of the Act? - When the assessee receives rent by leasing out the manufacturing facility it cannot also be said that the income is derived from the industrial undertaking. The value of the leased assets therefore had been rightly excluded by the Commissioner. The Tribunal was in error in reversing that decision of the Commissioner. The question referred is therefore answered in favour of the Revenue and against the assessee.

Summary

The High Court of Madras ruled that the value of stock-in-trade leased out by the assessee should not be considered as part of the capital employed for computing relief under section 80J of the Income-tax Act. The Tribunal erred in reversing the decision of the Commissioner, and the judgment favored the Revenue.