1982 (4) TMI 55 - HC - Income Tax

Summary

The High Court of Bombay ruled in favor of the assessee, M/s. Industrial Perfumes Ltd., in a case involving the computation of capital employed in a new industrial undertaking for tax exemption. The ITO's rectification order under section 154 of the Indian Income Tax Act was deemed unjustified as the inclusion of average profit in the capital calculation was debatable. The Tribunal upheld the assessee's view, citing a previous case involving Tata Engineering & Locomotive Co. Ltd. The High Court held that no mistake was apparent in the original order, leading to the cancellation of the rectification order. The High Court concluded that the rectification order was not valid in law for the assessment year 1962-63.