9911796707
TMI Blog1984 (8) TMI 126X X X X Extracts X X X X X X X X Extracts X X X X ..... ar ended on31st March, 1978. The ITO had completed assessment under s. 143(3) on 6th Feb., 1979 when he had allowed investment allowance on addition to plant machinery of Rs. 3,34,282 25 per cent at Rs. 83, 570. He had also allowed export market development allowance of Rs. 2,12,000 as against the assessee's claim to Rs. 2,34,962, the income was computed at nil by setting off brought forward, unabsorbed setting off brought forward, unabsorbed development rebate, ITO computed deficiency under s. 80J(3) at Rs. 1,76,525 which he carried forward. ITO reopened the assessment under s. 147(b) on 31st March, 1981 on the ground that excess 80J claim had been allowed on secured loans on Rs. 1.01 crores @ 6 per cent at Rs. 6,11,913 which had to be w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5. CIT(A) upheld the ITO's action regarding reopening of assessment holding that retrospective amendment of s. 80J did constitute information for reopening of assessment. Even on merits, CIT(A) observed that investment allowance under s. 32A was allowable on machinery plant and as the assessee did not produce account books before ITO in the reassessment proceedings or before CIT(A), therefore, ITO was right in holding that the assessee was not entitled to investment allowance. Regarding export market development allowance, CIT(A) upheld the ITO's action in the absence of account books produced before ITO in the reassessment proceedings or before CIT(A). Regarding the legality of reoping investment allowance and export markets developme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... High Court for deciding whether rectification orders were passed within the period of limitation. Thus, the said judgment does not support the proposition canvassed by the ld. counsel for the assessee that only rectification proceedings could be taken by ITO in the instant case as a result of amendment of s. 80J with retrospective effect after passing of the assessment order. The Supreme Court in Chatturam Horil Ram Ltd. vs. CIT (1955) 27 ITR 709 (SC) had held that passing of statute after making of original assessment was 'information' as to the state of law and, therefore, reassessment as a result of retrospective amendment was justified Law Practice of Income-tax by Kanga and Palkhivala, 7th Edn. p. 901 F.N. 25. 8. We thus hold that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing not an industrial company as 51 per cent of its income was non-industrial company) and the IAC had rejected the said reasoning and held that assessee company owned and was running an industrial undertaking engaged in the business of manufacture of iron and steel, i.e., mild steel billets. We approve the said reasoning. ITO has confused industrial undertaking as defined in s. 32A with industrial company as defined in Finance Act, an industrial undertaking may be one of the activities of the industrial company and for the purposes of allowing investment allowance under s. 32A or deduction under s. 80J, all that is to be examined is whether a particular activity could be called an industrial undertaking and for that purpose it was immateri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... weighted deduction under s. 359 and the ITO was not justified to withdraw the same. 14. In view of our decision on merits in favour of the assessee on the question of withdrawal of investment allowance and export market development allowance it is academic to discuss the question whether these items could be roped in reassessment though not mentioned in the reasons for reopening the assessment. We have already noted the CIT(A)'s reliance on CIT vs. Ahmedabad Mfg. Calico Printing Ltd. (1977) 106 ITR 159 (Bom). This was followed in CIT vs. Standard Motor Products of India Ltd. (1983) 35 CTR (Mad) 107 : (1983) 142 ITR 877 (Mad) where it was held that once the assessment is reopened, the ITO has not only the jurisdiction but the duty to det ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
