1988 (11) TMI 66 - HC - Income Tax

Summary

Issues involved:
1. Interpretation of section 80J(4) for industrial undertaking eligibility
2. Competency of Additional Commissioner to revise assessment
3. Competency to enhance assessment amount post time-barred revision

Issue 1 - Interpretation of section 80J(4) for industrial undertaking eligibility:
The assessee, a company manufacturing sintered bearings, set up a new unit for copper powder production, claiming relief under section 80J. The Additional Commissioner revised the assessment for 1970-71, disallowing the relief based on the Calcutta High Court decision. The Tribunal upheld this decision, citing lack of separate accounts for the new unit. However, the Supreme Court's rulings clarified that a new activity expanding the existing business does not disqualify for section 80J benefits. The Tribunal's objections were overruled as the new unit was not considered a reconstruction of the old business, and separate accounts were indeed maintained. Thus, the first question was answered in favor of the assessee.

Issue 2 - Competency of Additional Commissioner to revise assessment:
The Additional Commissioner revised the assessment for 1970-71, enhancing the income due to the disallowed relief under section 80J. This action was taken after the issue was determined in the assessment for 1969-70. The Tribunal and the court upheld the Additional Commissioner's authority to revise the assessment, leading to the enhancement.

Issue 3 - Competency to enhance assessment amount post time-barred revision:
The Additional Commissioner enhanced the assessment amount for 1970-71 by the disallowed relief amount from 1969-70, even though the revisional proceedings for 1969-70 were time-barred. The Tribunal and the court did not delve into this issue due to the favorable decision on the first question, rendering further consideration unnecessary.

In conclusion, the court ruled in favor of the assessee regarding the interpretation of section 80J(4) and did not address the other issues due to the resolution of the primary matter.