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Issues:
1. Interpretation of section 15C of the Indian Income-tax Act, 1922 regarding relief for new industrial undertakings. 2. Whether the inclusion of average profits in the capital employed for relief under section 15C was justified. 3. Jurisdiction of the Income-tax Officer to rectify orders under section 154 based on apparent mistakes. Detailed Analysis: 1. The judgment revolves around the interpretation of section 15C of the Indian Income-tax Act, 1922, which provides relief for new industrial undertakings. The case involved a public limited company engaged in manufacturing locomotives and trucks, claiming relief under section 15C for the assessment years 1957-58 and 1958-59. The controversy centered around the computation of capital employed by the company in its industrial undertaking to determine the extent of relief entitled under the section. 2. The key issue in the judgment was whether the inclusion of average profits in the capital employed for relief under section 15C was justified. The company initially claimed relief based on including average profits in the capital, which was accepted by the Income-tax Officer. However, in subsequent proceedings under section 154, the Income-tax Officer deducted the average profits from the capital, leading to a dispute. The Tribunal acknowledged that the question of including average profits in the capital employed was debatable, with two possible interpretations of the relevant rule. 3. The judgment also delves into the jurisdiction of the Income-tax Officer to rectify orders under section 154 based on apparent mistakes. The Tribunal, while accepting the assessee's contention that the inclusion of average profits was justifiable, emphasized that the interpretation of the relevant rule was debatable. The court cited precedents and held that the rectification orders passed by the Income-tax Officer for the assessment years 1957-58 and 1958-59 were not justified. The court also highlighted dissenting views from other High Courts on similar issues related to rectification of orders under tax laws. In conclusion, the court answered the referred question in the negative and in favor of the assessee, directing the revenue to pay the costs of the reference. The judgment underscores the importance of a thorough interpretation of tax laws and rules while determining the eligibility for relief under specific provisions like section 15C of the Income-tax Act.
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