1980 (4) TMI 103 - HC - Income Tax

Summary

Issues:
- Claim for deduction of aggregate amounts under section 80J for multiple assessment years
- Requirement of furnishing relevant particulars for claiming relief under section 80J
- Interpretation of section 80J in relation to newly established industrial undertakings
- Consideration of statutory obligations for claiming relief under section 80J
- Allowance of carry forward of section 80J relief in subsequent assessment years

Analysis:
The judgment pertains to a private limited company engaged in the manufacture and sale of insulators for electrical industries. The company claimed relief under section 80J for the assessment year 1972-73, amounting to Rs. 1,38,190, which included amounts from previous assessment years. The Income Tax Officer (ITO) allowed a deduction of only Rs. 51,389 for the current assessment year, disallowing the claim for the previous years due to lack of furnished particulars. The company contended that it was not a statutory requirement to quantify the relief under section 80J in the relevant assessment years and that the relief could be claimed when profits were made. The Appellate Assistant Commissioner (AAC) rejected this argument, leading to an appeal before the Tribunal.

The Tribunal held that section 80J was intended to encourage new industrial enterprises and should be liberally construed. It found no requirement in the law for the assessee to have quantified the deduction in the relevant assessment years. The Tribunal accepted the company's claim and directed the ITO to verify the details provided by the assessee. Subsequently, the Tribunal referred a question to the High Court regarding the allowance of the aggregate deduction for the previous years in the current assessment year, despite the failure to furnish relevant particulars in the respective assessment years.

The revenue contended that relief under section 80J can only be allowed if the conditions specified under section 80J(4) are fulfilled, which necessitates the furnishing of necessary particulars in the initial year of the industrial undertaking's establishment. However, the High Court referred to a previous judgment and highlighted that section 80J is meant to provide incentives to industries and allows for the carry forward of deductions even in cases where the claim was not made in preceding assessment years due to losses incurred.

Ultimately, the High Court upheld the Tribunal's decision, stating that the company's claim for deduction under section 80J for the previous assessment years should be allowed for the current assessment year, despite the lack of claims in the earlier years where no profits were generated. The High Court answered the referred question in favor of the assessee, emphasizing the admissibility of the claim subject to verification of details. The assessee was awarded costs, including counsel fees.